US issues new guidance for small business loans, pressures public companies to return funds

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The SBA issued new guidance that makes it less likely that big, publicly traded companies can access the next round of small business relief funding.

, while also disclosing that clients of its commercial banking division, which caters to larger companies, generally fared better than those of its small business department.

In its latest guidance, the SBA appeared to allow banks to rely on borrowers' certification about the true need of their loans. But in a key detail, the SBA indicated that large public companies who tapped the PPP before the rule change can avoid scrutiny by returning the relief loans in two weeks: "Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith," the SBA said.

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Chuckle.

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