Hedge Funds Ineligible for Paycheck Protection Program Loans
From the Desk of Jim Eccleston at Eccleston Law LLC:
The Paycheck Protection Program (“PPP”), which was supposed to provide forgivable loans to small businesses, has come under fire after it came to light that large, publicly traded companies had received loans through the program. Potbelly, Shake Shack and Ruth’s Hospitality Group, the parent company of Ruth’s Chris Steak House, eventually announced they would return the loans after facing public backlash. Potbelly and Shake Shack each received $10 million from the PPP, while Ruth’s Hospitality Group received $20 million.
The Small Business Administration (“SBA”), the agency that oversees the PPP, announced that hedge fund firms and Private equity firms will not be eligible to receive PPP loans. The SBA decided that hedge funds were ineligible to receive PPP loans because they are primarily engaged in speculative investing. This announcement from the SBA comes as the agency tries to tailor the program to get loans to the small businesses that were the intended recipients.
The PPP received an additional $310 billion in funding after the initial funding was exhausted.
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Related Attorneys: James J. Eccleston
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