Treasury Secretary Steven Mnuchin is sending a warning to businesses obtaining funding under the Payment Protection Plan (PPP) designed for small businesses.
Mnunchin spoke about the ongoing issue during a phone interview on CNBC’s “Squawk Box.”
Since businesses began submitting loan applications during the first round of funding, many reports have uncovered details about not-so-small businesses being approved for substantial amounts. While Mnuchin noted that he is pleased some businesses have returned loan proceeds they did not qualify for, some have not.
“It is unfortunate that there is a small number of companies that have created a lot of publicity that took loans,” Mnuchin said. “I think it was inappropriate for most of these companies to take the loans.”
Because of that, he’s issuing a warning about the consequences that could follow ahead of the additional $310 billion being made available to businesses this week.
“We’re going to do a full audit of every loan over $2 million. This was a program designed for small businesses. It was not a program designed for public companies that have liquidity,” Mnuchin said.
Hear Mnuchin’s interview below:
Mnuchin’s warning follows a string of reports about public businesses receiving small business funding. In a matter of days, the $349 billion in PPP was depleted leaving many small business owners in limbo. The quick drain caused an uproar that led to questions about where the funds went.
The Washington Post confirmed franchises, restaurant chains, hotel chains, and some publicly traded companies had been included under small business funding.
AutoNation, Ruth Chris, and even the Los Angeles Lakers have received more than $100 million, collectively — those companies are returning the PPP funds.
According to the Treasury Department guidelines, the PPP is supposed to be designated businesses with less than 500 employees. Businesses are required to verify the number of employees on their payroll, use the funds to pay workers, and agree to maintain the initial number of employees.