WASHINGTON (Reuters) – The U.S. government’s $660 billion program to rescue small businesses hit by the coronavirus pandemic saddles borrowers with rules that undermine the intention of Congress and failed to prioritize the right businesses, a government watchdog said on Friday.
“We did not find any evidence that (the Small Business Association) issued guidance to lenders to prioritize the markets indicated by the Act,” the inspector general said in a 40-page report https://www.oversight.gov/sites/default/files/oig-reports/SBA_OIG_Report_20-14_508.pdf, referring to rural, women-owned and minority businesses that were meant to get access to the Paycheck Protection Program, part of the $2.3 trillion CARES act.
Tens of thousands of borrowers may not be able to convert the money to grants as Congress intended because of rules that require them to use 75% of funds to cover payroll, a requirement not in the law itself, the report said.
(Reporting by Heather Timmons; Editing by Chris Reese)
