The Small Business Administration will conduct a “full audit” of Paycheck Protection Program loans made in amounts over $2 million to ensure the borrower’s legitimate economic need before they can be forgiven, Treasury Secretary Steven Mnuchin told CNBC today. In an interview on Squawk Box this morning, Mnuchin emphasized that the onus is on the borrower to certify their economic need when seeking a PPP loan.
“It’s the borrowers who have criminal liability if they made this certification and it’s not true,” Mnuchin confirmed, responding to recent reports of large firms—including professional sports franchises—who have sought and received PPP funding. Mnuchin added that the PPP “was a program designed for small businesses—it was not a program designed for public companies that had liquidity. The certification was very clear in saying that if people had other sources of liquidity, they could not take this loan.”
Mnuchin added that of the PPP loans made so far, approximately one million have gone to companies with fewer than 10 employees. He also said that he was “highly encouraged” to see the average loan size falling, noting that the average loan size in the backlog of loans waiting to be processed is less than $100,000. “We’re going to do what we need to do to make sure everybody is treated fairly in this program,” he said.