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New SBA guidelines ask big companies to consider returning coronavirus loans

An earlier program didn’t prohibit valuable companies with access to other capital from receiving loans. New rules suggest they should return the money by May 7.

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April 23, 2020 at 5:59 p.m. EDT
Ruth's Chris Steak House agreed Thursday to return $20 million it received under the SBA's Paycheck Protection Program after the Treasury Department issued new rules stating publicly held companies may not qualify for the loans. (Elijah Nouvelage/Reuters)

With Congress preparing to approve more than $300 billion in new funding for a small-business loan program, the Small Business Administration issued new guidance Thursday that suggested dozens of publicly held companies that previously received loans under the program should return the funds by May 7.

The SBA’s original $349 billion Paycheck Protection Program contained a vague requirement that businesses certify that “current economic uncertainty makes this loan request necessary.” The new guidance is more explicit and said companies that had other sources of cash probably would not qualify.