U.S. Treasury Secretary Steve Mnuchin announced plans Tuesday to conduct a full audit of the largest recipients of emergency small business loans through a COVID-19 relief program.
Established to quell financial hardships brought on by the COVID-19 pandemic, forgivable loans provided through the $660 billion Paycheck Protection Program are meant to aid small businesses with 500 employees or less.
In the past month, however, many big companies have reportedly tapped into the funds. Among them are Wall Street-backed firms, fast food chains and the Los Angeles Lakers basketball team.
After hearing intense public criticism, including from Mnuchin on Tuesday, the Lakers opted to return the roughly $4.6 million it received.
In an interview with CNBC’s Squawk Box, Mnuchin said the government will begin auditing any company that takes out more than $2 million from the program.
“I’m going to be putting out an announcement later this morning that for any loan over $2 million, the Small Business Administration will be doing a full review of that loan before there is loan forgiveness,” Mnuchin said Tuesday.
During a press conference with President Donald Trump on Tuesday afternoon, Mnuchin said about 60 million Americans have benefited from the nearly $1 trillion in relief funds prescribed by Congress to invest in small businesses.
“That’s over $650 billion in the [Paycheck Protection Program], that’s over $300 billion in disaster loans and that’s over $20 billion of grants,” he said.
Mnuchin said media reports of companies receiving large amounts in loans from the federal government through the program also would be examined. The companies taking more than $2 million will undergo “a full review for forgiveness before they’re repaid,” he said.
He also said the Treasury Department was almost finished sending direct economic impact payments to about 120 million Americans, and those who haven’t received their payment yet should visit the IRS website to check on the status.
“We made some corrections to the website over the weekend, please go on and check your payment if you haven’t received your payment, upload your information so we can get you the money,” he said. “The combination of the direct payments, the [Payment Protection Program], the disaster loans and enhanced unemployment insurance is the investment that the president has made in American business and American workers.”
On March 27, President Donald Trump signed into law the $2.2 trillion Coronavirus Aid, Relief and Economic Securities, or CARES, Act to help business and individuals weather the economic difficulties brought on by Covid-19.
The law included the Paycheck Protection Program, which opened to borrowers on April 3. The program last week ran out of the $350 billion it originally received and lawmakers approved another $310 billion to replenish it last week.
To help keep mom-and-pop shops afloat, the loans will be entirely forgiven as long as the funds are spent by the businesses on expenses such as payroll, mortgage interest and rent.
— By Erika Williams and Jack Rodgers, CNS