Small business administration published new guidelines Thursday, making it less likely that large publicly traded companies will be able to access the next round of funding from the U.S. government’s Small Business Assistance Program. He also stepped up pressure on state-owned companies that used funds to repay the money.

The update comes after public fury that large companies operated the facility, known as the Paycheck Protection Program, for hundreds of millions of dollars in loans while thousands of small businesses have yet to receive funding.

Companies requesting the coronavirus Relief funds must certify that the loans are necessary and that they cannot tap into other sources of money, the SBA said. By definition, state-owned enterprises have access to capital markets. For example, Shake Shack said it returned the $ 10 million earned through the PPP after selling $ 150 million in new shares.

“Borrowers should always certify in good faith that their PPP loan application is necessary,” the SBA said. “It is unlikely that a state-owned enterprise with substantial market value and access to capital markets can make the required certification in good faith, and such an enterprise must be prepared to demonstrate to the SBA, upon request, the basis of its certification. “

Change comes as a second round of financing for PPP, after the initial $ 350 billion was exhausted last week, is expected to be approved by lawmakers later Thursday. The program is expected to generate $ 310 billion in fresh funds, and industry executives have said even that amount will likely only last a few days. There is no guarantee that lawmakers will approve more money for the program after this.

While the spirit of the PPP, a key part of the Trump administration’s more than $ 2 trillion economic response to the coronavirus pandemic, was to help small businesses, the program’s first round rules have allowed large restaurant and hotel companies to apply for loans of up to $ 10 million.

When this happened, and businesses like Ruth’s Chris Steakhouse and Potbelly Sandwich Shop were found to have used the program, small business owners became enraged.

The backlash intensified as companies worth more than $ 100 million on the stock market successfully requested relief. Companies including Global DMC, Life Sciences Wave and Fiesta Restaurant Group won the loans, according to a research note Tuesday from Morgan Stanley.

Lenders, including JPMorgan Chase and Bank of America have borne the brunt of the criticism, as small business owners have argued that large companies get preferential treatment when they ask for the lifeline. JPMorgan has specifically denied this allegation, while also revealing that clients in its commercial banking division, which caters to large businesses, generally fared better than those in its small business department.

In its latest guidelines, the SBA appeared to allow banks to rely on certification of borrowers regarding the true need for their loans.

But in a key detail, the SBA said large state-owned companies that used the PPP before the rule change can avoid scrutiny by returning the relief loans in two weeks:

“Any borrower who has applied for a PPP loan before the publication of these guidelines and repays the loan in full by May 7, 2020 will be deemed by the SBA to have made the required certification in good faith,” the SBA said.

Here’s what the SBA said about public companies that get loans:

“Question: Are businesses owned by large corporations with sufficient sources of liquidity to support the day-to-day operations of the business eligible for a PPP loan?

Reply: In addition to reviewing the applicable membership rules to determine eligibility, all borrowers should assess their economic need for a PPP loan against the standard established by the CARES Act and PPP regulations at the time of loan application. Although the CARES Act suspends the ordinary requirement that borrowers must not be able to obtain credit elsewhere (as defined in Section 3 (h) of the Small Business Act), borrowers must still certify good credit. faith that their PPP loan application is required. Specifically, before submitting a PPP application, all borrowers should carefully review the required certification that “[c]the current economic uncertainty makes this loan request necessary to support the applicant’s ongoing operations. “For example, a public company with substantial market value and access to capital markets is unlikely to be able to do certification required in good faith, and such a company must be prepared to demonstrate to the SBA, upon request, the basis of its certification.

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