The Treasury Department is asking publicly traded companies to return their loans from the federal government by May 7, according to new guidance issued on Thursday.
Large companies that drew from the fund were criticized after many small businesses, the intended recipients, were unable to access loans as the fund ran out of money.
Some public companies, like Shake Shack, gave back the money after they realized small businesses weren’t able to access the loans, but some companies, such as Potbelly, have held on to the funds.
The Treasury Department is asking publicly traded companies who received loans from a fund intended to help small business recover from the pandemic to return the money by May 7 or face consequences, according to new guidance issued on Thursday. The department said it was “unlikely that a public company with substantial market value and access to capital markets” could prove that a federal loan was necessary for it to stay afloat. The request from the Treasury Department came after large companies who took loans from the program were criticized heavily as the fund ran out of money — and many small businesses, which the money was intended to help, were unable to get a loan.