U.S. companies on Thursday began refusing government loans they were just awarded, after the Treasury Department said that publicly traded firms would have a hard time proving they really needed the coronavirus relief funds.
Under the original guidance from the Treasury Department, companies applying for PPP loans had to certify that “current economic uncertainty makes the loan necessary to support ... ongoing operations.”
“It is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith,” the Treasury said. The new guidance prompted the program’s largest recipient, the Ruth’s Chris Steakhouse chain to say it would quickly repay its $20 million loan to maintain its payroll during coronavirus-prompted shutdowns.
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