42 public companies are returning their small business loans after Mnuchin threat

(Image credit: MANDEL NGAN/AFP via Getty Images)

published 6 May 2020

Treasury Secretary Steven Mnuchin's threats may have worked, at least in part.

The Associated Press reports 42 public companies as of Wednesday have agreed to return the $337 million they received as part of the federal government's small business loan strategy known as the Payroll Protection Program. The PPP was set up to help small businesses pay their employees, but larger companies like Shake Shack and the Los Angeles Lakers drew criticism when they were also revealed as recipients (both have returned the money).

Mnuchin wasn't pleased to hear about that, and last month said "anybody that shouldn't have taken the money" won't have their loans forgiven and could even be subject to criminal liability. Not everyone's buying the latter part — legal experts say the government would have to prove that companies understood what it was asking in the application process, which many companies say wasn't clear. Further, none of the 42 companies have explicitly pointed to Mnuchin's words as the impetus for them returning their funds. But it does seem reasonable that the backlash against bigger companies taking the loans, in addition to more clarity about the program, played a role in the latest development. Read more at The Associated Press.

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Tim is a staff writer at The Week and has contributed to Bedford and Bowery and The New York Transatlantic. He is a graduate of Occidental College and NYU's journalism school. Tim enjoys writing about baseball, Europe, and extinct megafauna. He lives in New York City.

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