The Small Business Administration updated its FAQ document on Thursday, and it specifically addresses large businesses applying to its Paycheck Protection Program after the program ran dry.
The guidance doesn't formally change any rules of the program, and big companies can technically still apply. However, the SBA says it's "unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith." It also says "such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification." Some lawmakers say the guidance is a "step in the right direction," but that it's not good enough because it's "not formal guidance."
The program ran out of money less than two weeks after opening for applications, barring thousands of small businesses from applying for federal loans during the coronavirus pandemic. The loans are meant for businesses with less than 500 employees, but certain exemptions made it possible for some large companies to receive money.
"Small businesses in my district are desperate for assistance, but stymied by a lack of funding and unfair treatment by the big banks and the SBA," Democratic Rep. Jerry Nadler said.
Congress approved a fourth coronavirus stimulus bill Thursday that includes $310 billion to replenish the program.
"If you ever had a small business, you realize you're the first to work, you're the last to leave and you're the last to be paid," Republican Rep. Kevin McCarthy said. "You know those who work with you are not just employees, they are your family. You know their children's name, you're their at their weddings, you're there when they graduate and you're proud of them. You never want to have to say you're going to lay them off."
The SBA said large public companies who already received funding from the PPP before the new guidance was issued can return the relief loans by May 7. One of those companies, Shake Shack, has said it will return the $10 million it received through the program after it sold $150 million in new shares.
