U.S. Treasury Secretary Steven Mnuchin said he was pressing ahead with the Friday launch of a $349 billion coronavirus rescue loan program for small businesses, after conceding to bank demands to fix aspects of the program that they said could cause participating lenders legal and financial risks.
FILE PHOTO: U.S. Treasury Secretary Steven Mnuchin testifies before the Senate Finance Committee during a hearing on the President's FY2021 Budget on Capitol Hill in Washington, U.S., February 12, 2020. REUTERS/Yuri Gripas
“You get the money, you’ll get it the same day, you use this to pay your workers. Please bring your workers back to work if you’ve let them go,” Mnuchin said. It will allow banks to rely on certifications from borrowers, and reassures banks they will not be liable if borrowers break the rules of the program.
Then on Tuesday, the Treasury released a two-page document that appeared to contradict several items the banks thought they had agreed, leaving lenders on the hook for verifying the loans. The $349 billion government-guaranteed loan program is a centerpiece of the $2.2 trillion U.S. coronavirus rescue package. Depending on their size and payroll, owners of businesses can get loans of up to $10 million to cover about eight weeks of payroll and other qualified overhead expenses such as rent and utilities.
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