House Speaker Nancy Pelosi passes a bust of President Abraham Lincoln Wednesday at the U.S. Capitol in Washington, D.C. The House will vote Thursday on another round of stimulus to fund vital parts of the economy. Photo by Kevin Dietsch/UPI | License Photo
April 23 (UPI) -- The Small Business Administration issued new guidance Thursday for its emergency loan programs and advised larger public companies against applying for loans from the relief fund.
The SBA announced the guidance after its Paycheck Protection Program ran out of money last week and multiple larger businesses later said they would return loans they'd received from the fund.
The Senate approved a bill this week to replenish the fund with another $310 billion. The House is expected to pass it Thursday.
The bill also includes $60 billion for SBA disaster assistance loans and grants, $75 billion for hospitals and $25 billion for expanded testing.
"Borrowers must make [applications] in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business," the SBA guidance said.
"For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required [verification they are eligible] in good faith."
The SBA said all larger companies that previously received loans from the PPP fund would no longer qualify and should return any money they received within two weeks.
"Any borrower that ... repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith," it said.
One of those companies, national burger chain Shake Shack, said last week it would return $10 million it was loaned from the fund.
The SBA set up the $350 billion fund, as part of the $2.2 trillion CARES Act, to help small businesses with a workforce of fewer than 500, continue to pay employees.
Bass Pro Shops marketing manager David Smith (R) carries a box of donated face masks into Mercy Health in Chesterfield, Mo., on May 13. The company is donating 1 million FDA-approved ASTM Level 1 Procedure Face Masks to healthcare workers and first responders working on the front lines of the pandemic. Photo by Bill Greenblatt/UPI | License Photo