The new COVID-19 relief plan for small businesses that President Donald Trump signed early this week doesn’t address some weaknesses in the original stimulus legislation that allowed companies with checkered histories to get billions of dollars in payments, The Wall Street Journal reports.
The $900 billion pandemic-aid bill includes an additional $284 billion for the Paycheck Protection Program to support small businesses. In the earlier stimulus, 5.2 million small businesses borrowed $525 billion in forgivable loans.
Nearly 1,500 companies that received about $2 billion in PPP loans have faced allegations of violating government regulations or of criminal conduct, according to a Wall Street Journal analysis of loan recipients and news sources.
The government has charged dozens of people in at least 36 complaints related to fraudulently obtaining coronavirus relief funds, many for allegedly falsifying PPP loan applications and misappropriating the funds, according to a Journal review of Justice Department data.
The new legislation, with its second round of PPP funding, doesn’t address how the government will verify revenue declines or whether companies facing litigation or that have violated government regulations should be eligible, however, An SBA spokesperson says the agency is working quickly to update rules for PPP borrowers and lenders. Read the full story.