The Treasury Department issued new guidance on Thursday (April 23) directing publicly traded companies to return Paycheck Protection Program (PPP) loans by May 7 if they can’t prove they were eligible for a loan.
Public backlash has been building as it was revealed that public companies and big chains worth millions received relief money earmarked for struggling small businesses with less than 500 employees. The funding was released on April 3 and was depleted in days. The new guidelines require companies to certify with their lender that they need the loan and cannot access the money from other sources.
“All borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application,” the guidance states. “Borrowers still must certify in good faith that their PPP loan request is necessary.”
The data analytics firm FactSquared indicated that 179 public firms received $676 million in forgivable PPP loans. The company used an artificial intelligence (AI) bot named Margaret to crawl SEC K-8 filings in real-time.
The hotel group Ashford Hospitality Trust — which includes big names like Marriot, Hilton and Ritz Carlton — was among the biggest loan recipients, awarded a total of $30 million. Loans for its properties ranged from $86,000 to $3.7 million.
The $2 trillion CARES Act stimulus package included $350 billion for the PPP, which was intended to benefit workers at businesses and nonprofits with fewer than 500 employees. Congress approved another round of funding totaling $320 billion. The program has a $10 million loan limit, but larger businesses applied through subsidiaries.
President Donald Trump is expected to sign the new funding bill Friday (April 24). The package includes $75 billion for hospitals and $25 billion in funding for testing for the virus.