More Than $38 Billion in PPP Loans for Small Firms Canceled
(Bloomberg) - Around $ 38.5 billion in corona virus relief loans were canceled for small businesses at the end of May, as many companies returned loans after a public outcry over larger, funded companies, while others raised concerns Debt has been boosted by borrowing is becoming a grant.
The value of the canceled loans was recorded on Thursday in a government accountability office report, based on data from the Small Business Administration showing that as of May 31, more than 170,000 loans were canceled, of which more were reported. The reasons for the cancellation were not specified in the GAO report.
The SBA has not provided detailed accounts of whether the Pay Check Protection Loans have been canceled due to returns, duplicates, or other reasons. An SBA spokesman did not immediately respond to a request for comment.
The SBA reported Wednesday evening that more than 4.7 million loans totaling $ 516.5 billion were approved, including cancellations. By June 20, there were only about $ 128 billion left until the agency accepted new applications on Tuesday.
Many companies hurried to cancel PPP loans after companies like Shake Shack Inc. and the Los Angeles Lakers received millions in credit from corner shops. This prompted the Trump administration to warn companies with significant market value and access to capital markets that they were unlikely to qualify for PPP - and that all loans in excess of $ 2 million were reviewed to determine if they qualified.
Small businesses also reported holding or considering their loans because they were unsure whether they would be required to repay debt. The loans are granted when most of the income is spent on the payroll, but the SBA and the finance department published guidelines and rules for the lending process too late.
The SBA has not provided information on duplicate credit. The agency should determine whether an applicant already had a loan to avoid duplication. Many borrowers desperately looking for funding submitted multiple applications through different lenders, and sometimes different identification information was used, the SBA said.
Democratic representative James Clyburn, chair of a house committee that oversees coronavirus aid spending, has asked the SBA inspector general to investigate reports that the agency may have approved more than a thousand double PPP loans, up to Could cost $ 100 million.
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