Recent Comments by US Treasury Secretary Mnuchin Should Give PPP Applicants Pause

In statements made yesterday on “Squawk Box” on CNBC, Secretary Mnuchin said:

“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,” and regarding the Los Angeles Lakers, the NBA’s second-most valuable team, that took out a $4.6 million loan (which the team announced on Monday it had returned):

“I’m not a big fan of the fact that they took $4.6 million,” Mnuchin said. “I think that’s outrageous.” Mnuchin added he “would have never expected in a million years that the Los Angeles Lakers” would take such a loan. He also said he was glad the team returned the money, “or they would have had liability.”

These statements cast a further pall on PPP applicants already struggling to determine if they can make the required PPP application certifications[1] regarding the need for the funds in light of recent SBA guidance.

[1] Discussed in our earlier COVID-19 blog postings on April 23, 2020 “Clear as Mud: SBA Offers Further Clarification to PPP Eligibility)” and April 28, 2020 “Still Clear as Mud (Unfortunately): SBA’s Latest Official FAQ Fails to Provide Meaningful Guidance for Potential PPP Borrowers”.

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