Mnuchin says companies that take $2 million-plus loan from small businesses program will face audit

Big name companies including the L.A. Lakers and Shake Shack took out but repaid the loans

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Secretary of the Treasury Steve Mnuchin
Secretary of the Treasury Steve Mnuchin
(Mark Makela / Getty Images)
Last Updated:
April 28, 2020 - 1:31pm

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Treasury Secretary Steven Mnuchin warned Tuesday that any company taking out a forgivable loan exceeding $2 million from an emergency, small business relief program will get audited. 

Mnuchin made the announcement amid continuing reports that big businesses were taking advantage of the Paycheck Protection Program, passed by Congress and signed into law to help companies with fewer than 500 employees survive the coronavirus shutdown.

“I’m going to be putting out an announcement later this morning that for any loan over $2 million, the Small Business Administration will be doing a full review of that loan before there is loan forgiveness,” Mnuchin said Tuesday on CNBC’s “Squawk Box.”

The program allows companies to have their loans forgiven, provided they spend the funds on payroll, benefits, rent and utilities. 

“This was a program designed for small businesses," Mnuchin also said. "It was not a program that was designed for public companies that had liquidity.”

More than 220 public companies applied for at least $870 million from the government program, according to CNBC, citing analytics from Washington-based FactSquared. 

Among the most high-profile corporate names are the Shake Shack restaurant chain and the Los Angeles Lakers pro basketball team, each of which has repaid the money. 

Mnuchin put the blame on the companies, not the banks that marshaled the loans.

The PPP is so popular that it ran out of money just days after Congress appropriated $349 billion. Members last week agreed to put an additional $310 billion into the program.