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Mnuchin open to easing limits on small businesses coronavirus loans

Treasury Secretary Steven MnuchinSteven Terner MnuchinFinancial groups applaud Biden Treasury pick Yellen US sanctions Chinese company for conducting business with Maduro regime Monumental economic challenges await Biden's Treasury secretary MORE on Monday said that he’s willing to work with Congress on bipartisan fixes to a popular but controversial emergency coronavirus loan program for small businesses.

Mnuchin said Monday that he was open to changing the terms of the Small Business Administration’s (SBA) and the Treasury Department’s Paycheck Protection Program (PPP) amid growing concerns from lawmakers and business advocates about the terms of the loans offered.

The PPP offers loans to small businesses facing financial peril because of the pandemic to prevent layoffs and enable vulnerable firms to retain employees. The loans can be entirely forgiven if the business uses the money for eight weeks of payroll plus 25 percent of all overhead costs that period, according to rules issued by the SBA.

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While the PPP has wide bipartisan support, lawmakers and business owners have called on the Trump administration to give recipients more flexibility to hold on to their loans for longer and use more of the funding to cover overhead.

The SBA inspector general also warned in a Friday report the administration’s 25 percent cap on overhead costs eligible for forgiveness did not align with the law that created the PPP and could harm the businesses the program intends to help.

Mnuchin tamped down concerns about the program Monday and insisted that the SBA rules were an accurate reflection of the law as written by Congress.

“This program is working great. It's getting money to the workers,” Mnuchin said Monday in an interview on CNBC’s “Squawk on the Street.”

“The way Congress designed this was eight weeks of payroll and 25 percent of overhead. If Congress wants to change that rule, I'm happy to work with Congress if there's bipartisan support to do that,” he continued.

Mnuchin also said he was open to making a “technical fix” to aid businesses that may not be able to open soon even under loosening social distancing rules, including restaurants.

“Many of the restaurants are just beginning to open up and have said that, you know, they'd really like to hold the money. They can't do that. That's not something we can do, but we'll look at a technical fix,” Mnuchin said.