On-the-fly rule changes are bedeviling small business owners who got government-backed Paycheck Protection Program loans meant to keep them afloat during the coronavirus shutdown, The Wall Street Journal reports.
The Treasury Department and the Small Business Administration have issued nine “interim final rules” and more than 40 pieces of guidance in the form of “frequently asked questions” since the program’s April rollout. The most recent updates came last week, after more than 4 million loans totaling over $500 billion had been approved.
Treasury Secretary Steven Mnuchin said Monday that the government was looking at additional technical fixes to the program. Small businesses and lenders are still awaiting guidance that will be used to determine whether and how loans are forgiven. There is little information available for how to count staff or whether bonuses are allowed.
Some lenders have approved loans only to find the borrowers ineligible for government backing days later. Borrowers who have received loans are weighing—in light of new rules—whether they can keep the money.
An SBA spokesman told The Wall Street Journal the PPP is an overwhelming success. “SBA and Treasury are quickly providing guidance in response to the needs of borrowers and lenders, resulting in over four million loans approved for more than $500 billion to America’s small businesses in just over five weeks’ time,” he said in a statement.
The SBA this morning released a detailed report on the second round of PPP funding saying that, from April 27 to May 8, more than 2.5 million loans were disbursed to businesses through roughly 5,400 lenders, amounting to nearly $189 billion.
Read the Wall Street Journal story here, and see the SBA report here.
