U.S. markets close in 1 hour 52 minutes

Trump Administration Extends Deadline to Return PPP Loans

Mark Niquette

(Bloomberg) -- The Trump administration extended the date that companies can return loans from a popular coronavirus relief program without paying a penalty by one week to May 14.

The U.S. Treasury Department and Small Business Administration had set May 7 as the date for firms that had improperly taken loans from the Paycheck Protection Program to repay them, but said in updated guidance posted on Tuesday that it’s extending the deadline by seven days.

The program allows for loans of as much as $10 million per company and is meant to help small firms affected by the pandemic keep workers on their payrolls.

Treasury Secretary Steven Mnuchin has said the program wasn’t designed for large companies with other resources after public outrage that large chains such as Shake Shack Inc. and the Los Angeles Lakers had swooped in to get loans during the program’s initial round of funding. Shake Shack, the Lakers, and others have said they’re giving the funds back.

The Treasury Department and SBA issued guidance on April 23 warning companies with large valuations and access to capital markets that it’s unlikely they could certify in good faith on their applications that the loan is “necessary to support the ongoing operations of the applicant.” Mnuchin also said the SBA will review all loans of more than $2 million for any criminal liability.

Public companies have received 339 loans totaling $1.16 billion as of Tuesday, and 42 loans have been returned worth $337.1 million, according to data compiled by FactSquared.

The SBA said Tuesday that $181.2 billion in loans have been approved as of 5 p.m. New York time out of the $320 billion that Congress authorized in a second round of loans under the PPP program. Almost 2.4 million applications have been processed so far, the SBA said.

The program’s initial round of $349 billion in funding ran out on April 16 after just 13 days and 1.66 million loan approvals.

(Updates with additional details from third paragraph)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2020 Bloomberg L.P.