Steven Mnuchin, U.S. Treasury secretary, speaks during a Senate Small Business and Entrepreneurship Committee hearing in Washington, D.C., U.S., on Wednesday, June 10, 2020.
Al Drago | Bloomberg | Getty Images
Companies have returned or canceled more than $30 billion in loans approved through the government’s emergency Paycheck Protection Program, a senior administration official said Monday.
The multibillion-dollar figure adds new context for the debate around the PPP and information on how many private companies applied for the loans.
Public companies, who typically had to disclose their receipt or application of a PPP loan in a government filing, have only returned about $430 million, according to data analytics firm FactSquared.
The PPP, created by the CARES Act in March, was designed to help small businesses cover payrolls costs during the Covid-19 outbreak and a historic contraction in U.S. commerce.
But the program came under scrutiny almost as soon as its approval as applicants drained its initial $350 billion in about two weeks and it was revealed that public companies secured loans while hundreds of thousands of far small businesses seeking relatively tiny amounts remained in need.
Since then, the SBA has worked to close that loophole, saying that big public companies “with substantial market value and access to capital markets” don’t qualify for the program. Companies including Ruth’s Hospitality Group and sandwich chain Potbelly have followed Shack Shack in returning their PPP funds.
Other companies may have decided to return the loans because they couldn’t meet the program’s original spending stipulations because their businesses remained closed.
Insight on the size of returned PPP loans was expected to come in tandem with an update from the Small Business Administration on the program’s progress thus far.
The administration said it’s allocated some $520 billion through 4.9 million loans through the end of June with the average loan size at an estimated $107,000.
After pushing back demands to disclose the identities of recipients, the SBA said it would release the names of companies who received at least $150,000. Still, 86.5% of the loans went to businesses that requested less than $150,000.
The update came just two days after President Donald Trump signed on Saturday a bill extending the deadline for submitting applications for the federal program. Roughly $130 billion of the $670 billion set aside for the PPP remains unclaimed.
Small-business owners now have until Aug. 8 to apply for PPP loans.
Some administration officials, such as Treasury Secretary Steven Mnuchin, say they hope to work with Congress to pass additional, more targeted stimulus legislation by the end of July.
“We do support additional legislation and we look forward to working with the House and Senate on that,” he told the House Financial Services Committee on Tuesday. Mnuchin said his efforts would center on “re-purposing” the $135 billion that remains available under the PPP.
— CNBC’s Hugh Son, Kate Rogers and Betsy Spring contributed reporting.
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