The SBA issued new guidance on Thursday making it less likely that big publicly traded companies can access the next round of funding for the U.S. government’s small business relief program.
The change comes as a second round of funding for PPP, after the initial $350 billion was depleted last week, is set to be approved by lawmakers. The program is set to get $310 billion in fresh funds, and industry executives have said that even this amount will likely last only days. There is no guarantee that lawmakers will approve more money for the program after that. Companies applying for coronavirus relief funds must certify that the loans are necessary and that they cannot tap other sources of funding, the SBA said. By definition, public companies have access to the capital markets. “It is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith,” the SBA said. In a key detail, the SBA indicated that large public companies who tapped the PPP before the rule change can avoid scrutiny by returning the relief loans in two weeks.