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| Small-Business Loan Deadline Poses Test for Mnuchin | Small-Business Loan Deadline Poses Test for Mnuchin |
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| WASHINGTON — When big businesses like Shake Shack and the Los Angeles Lakers basketball franchise took millions of dollars’ worth of emergency loans intended for small businesses, Treasury Secretary Steven Mnuchin called such borrowing “outrageous,” narrowed eligibility and threatened to hold companies criminally liable if they did not give the money back. | WASHINGTON — When big businesses like Shake Shack and the Los Angeles Lakers basketball franchise took millions of dollars’ worth of emergency loans intended for small businesses, Treasury Secretary Steven Mnuchin called such borrowing “outrageous,” narrowed eligibility and threatened to hold companies criminally liable if they did not give the money back. |
| But in the last month, large companies have continued to take out big loans through the Paycheck Protection Program, including publicly traded firms with ready access to other forms of capital. | But in the last month, large companies have continued to take out big loans through the Paycheck Protection Program, including publicly traded firms with ready access to other forms of capital. |
| That is posing a critical test for Mr. Mnuchin, who had set a Thursday deadline for firms that did not need the money or had other ways of obtaining capital to return their loans or face a government review and potential legal repercussions. Mr. Mnuchin’s threat is likely to set off a wave of new government audits and legal fights over who is entitled to money that was meant to keep small businesses afloat during the pandemic. Late on Wednesday, the Treasury extended the deadline, for a second time, to May 18. | That is posing a critical test for Mr. Mnuchin, who had set a Thursday deadline for firms that did not need the money or had other ways of obtaining capital to return their loans or face a government review and potential legal repercussions. Mr. Mnuchin’s threat is likely to set off a wave of new government audits and legal fights over who is entitled to money that was meant to keep small businesses afloat during the pandemic. Late on Wednesday, the Treasury extended the deadline, for a second time, to May 18. |
| “I’ve spent the better part of the last two weeks talking with clients about whether or not to return the funds,” said Paul J. Pollock, a lawyer at Crowell & Moring who has been advising about 100 companies on their loans. “Suddenly everybody needed to re-evaluate whether they met the eligibility requirements.” | “I’ve spent the better part of the last two weeks talking with clients about whether or not to return the funds,” said Paul J. Pollock, a lawyer at Crowell & Moring who has been advising about 100 companies on their loans. “Suddenly everybody needed to re-evaluate whether they met the eligibility requirements.” |
| That decision has been complicated by a series of rule changes enacted by the Treasury Department in the weeks since the program began. The new guidelines are intended to make it harder for big companies to qualify for loans but have been criticized for cutting off funds to companies that need money and have no other government help available to them. | That decision has been complicated by a series of rule changes enacted by the Treasury Department in the weeks since the program began. The new guidelines are intended to make it harder for big companies to qualify for loans but have been criticized for cutting off funds to companies that need money and have no other government help available to them. |
| In another last-minute twist on Wednesday, the Treasury said that loans for less than $2 million would be assumed to have been taken in “good faith,” relieving pressure on the millions of companies that received smaller loans. But it does nothing for the thousands of other firms that were approved for loans worth more than $2 million and claim they both qualified for and need the money. | In another last-minute twist on Wednesday, the Treasury said that loans for less than $2 million would be assumed to have been taken in “good faith,” relieving pressure on the millions of companies that received smaller loans. But it does nothing for the thousands of other firms that were approved for loans worth more than $2 million and claim they both qualified for and need the money. |
| Many companies have opted to risk Mr. Mnuchin’s scrutiny. In recent weeks, companies including the ONE Group Hospitality, Calumet Specialty Products Partners and XpresSpa have taken out millions of dollars’ worth of Paycheck Protection Program loans. Some of those firms have disclosed to investors that they have other available sources of credit, seemingly violating a requirement that Mr. Mnuchin tucked into the program’s guidelines late last month dictating that firms should not apply for funds if they were not in dire need of cash. | Many companies have opted to risk Mr. Mnuchin’s scrutiny. In recent weeks, companies including the ONE Group Hospitality, Calumet Specialty Products Partners and XpresSpa have taken out millions of dollars’ worth of Paycheck Protection Program loans. Some of those firms have disclosed to investors that they have other available sources of credit, seemingly violating a requirement that Mr. Mnuchin tucked into the program’s guidelines late last month dictating that firms should not apply for funds if they were not in dire need of cash. |
| The small-business lending program is the centerpiece of the $2 trillion economic relief effort to cushion the blow to businesses that were shuttered because of the coronavirus pandemic. The rollout of the program has been marred by complicated restrictions that have changed on the fly, leaving borrowers fearful that loans they assumed would be forgiven will actually leave them saddled with debt. | The small-business lending program is the centerpiece of the $2 trillion economic relief effort to cushion the blow to businesses that were shuttered because of the coronavirus pandemic. The rollout of the program has been marred by complicated restrictions that have changed on the fly, leaving borrowers fearful that loans they assumed would be forgiven will actually leave them saddled with debt. |
| The program has also become a political vulnerability for President Trump, as big-name corporations received funds while smaller mom-and-pop shops missed out. This week, former Vice President Joseph R. Biden Jr. said that if he is elected he will “review every single stimulus loan given to big companies and political insiders.” | The program has also become a political vulnerability for President Trump, as big-name corporations received funds while smaller mom-and-pop shops missed out. This week, former Vice President Joseph R. Biden Jr. said that if he is elected he will “review every single stimulus loan given to big companies and political insiders.” |
| That has put pressure on Mr. Mnuchin, who oversees the program, which is run by the Small Business Administration which has been racing to fix technology glitches and issue new rules to make the program more equitable. Mr. Trump has publicly praised the program, but some of his economic advisers have complained that Mr. Mnuchin overpromised and failed to deliver on the lifeline for small businesses. In a sign of the political importance of the program, Mr. Mnuchin recently dispatched his deputy, Justin Muzinich, to the Small Business Administration to ensure that things run more smoothly. | That has put pressure on Mr. Mnuchin, who oversees the program, which is run by the Small Business Administration which has been racing to fix technology glitches and issue new rules to make the program more equitable. Mr. Trump has publicly praised the program, but some of his economic advisers have complained that Mr. Mnuchin overpromised and failed to deliver on the lifeline for small businesses. In a sign of the political importance of the program, Mr. Mnuchin recently dispatched his deputy, Justin Muzinich, to the Small Business Administration to ensure that things run more smoothly. |
| While the complex web of requirements and the crush of bad publicity appear to have slowed demand for the loans, many big companies have continued to hold onto the money. | While the complex web of requirements and the crush of bad publicity appear to have slowed demand for the loans, many big companies have continued to hold onto the money. |
| A manufacturer of hydrocarbon products, Calumet Specialty Products Partners, received $31.4 million in funds through the program on May 1, according to a securities filing. While some of the loans were secured before the new guidance, the company acknowledged that if it were found to have violated the new rules it could face “significant civil, criminal and administrative penalties.” | A manufacturer of hydrocarbon products, Calumet Specialty Products Partners, received $31.4 million in funds through the program on May 1, according to a securities filing. While some of the loans were secured before the new guidance, the company acknowledged that if it were found to have violated the new rules it could face “significant civil, criminal and administrative penalties.” |
| XpresSpa Group, which runs airport spas and is hoping to repurpose its infrastructure for coronavirus testing, said on April 6 that it expected to raise roughly $3 million in a stock sale. On May 1, it obtained a $5.7 million P.P.P. loan through Bank of America | XpresSpa Group, which runs airport spas and is hoping to repurpose its infrastructure for coronavirus testing, said on April 6 that it expected to raise roughly $3 million in a stock sale. On May 1, it obtained a $5.7 million P.P.P. loan through Bank of America |
| The ONE Group Hospitality, operator of the glossy STK steakhouses, obtained $9.8 million in loans through the program on May 4, according to securities filings. The company said that it could not obtain new capital and “has restrictions under its existing credit facility that limit its ability to borrow, raise equity or take on additional debt.” | The ONE Group Hospitality, operator of the glossy STK steakhouses, obtained $9.8 million in loans through the program on May 4, according to securities filings. The company said that it could not obtain new capital and “has restrictions under its existing credit facility that limit its ability to borrow, raise equity or take on additional debt.” |
| Other restaurant groups continued applying for loans even as high-profile industry players like Shake Shack returned their funds from the program’s first round, often saying that they are unable to access capital elsewhere. | Other restaurant groups continued applying for loans even as high-profile industry players like Shake Shack returned their funds from the program’s first round, often saying that they are unable to access capital elsewhere. |
| Ark Restaurants, which owns a number of upscale restaurants including the Bryant Park Grill in New York and Sequoia in Washington, D.C., received a $9.4 million loan. Its chief executive, Michael Weinstein, said that many of its restaurants could not yet reopen and that it was not able to sell more stock or take out additional private loans. | Ark Restaurants, which owns a number of upscale restaurants including the Bryant Park Grill in New York and Sequoia in Washington, D.C., received a $9.4 million loan. Its chief executive, Michael Weinstein, said that many of its restaurants could not yet reopen and that it was not able to sell more stock or take out additional private loans. |
| “Everyone thinks we’re making fortunes and we have access to capital,” he said. “It couldn’t be further from the truth. | “Everyone thinks we’re making fortunes and we have access to capital,” he said. “It couldn’t be further from the truth. |
| Jeff Crivello, the chief executive of BBQ Holdings, which owns the Famous Dave’s chain, said that it was able to “certify with a high level of confidence that we meet the requirements” of the $13 million in loans obtained through its subsidiaries. | Jeff Crivello, the chief executive of BBQ Holdings, which owns the Famous Dave’s chain, said that it was able to “certify with a high level of confidence that we meet the requirements” of the $13 million in loans obtained through its subsidiaries. |
| Last Friday, a group of lawmakers including Representative Jim Clyburn, the South Carolina Democrat who chairs the Select Subcommittee on the Coronavirus Crisis, demanded that five public companies return their loans. One, MiMedx Group, quickly did so; a spokeswoman said that the repayment had been planned before Mr. Clyburn sent a letter. | Last Friday, a group of lawmakers including Representative Jim Clyburn, the South Carolina Democrat who chairs the Select Subcommittee on the Coronavirus Crisis, demanded that five public companies return their loans. One, MiMedx Group, quickly did so; a spokeswoman said that the repayment had been planned before Mr. Clyburn sent a letter. |
| Updated June 30, 2020 | |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| Two others indicated that they planned to keep the funds. | Two others indicated that they planned to keep the funds. |
| EVO Transportation and Energy Services said that it tried and failed to access new capital in March and that its investors were not able to sell their shares. | EVO Transportation and Energy Services said that it tried and failed to access new capital in March and that its investors were not able to sell their shares. |
| “EVO has and will continue to use the P.P.P. proceeds for payroll,” the company said. | “EVO has and will continue to use the P.P.P. proceeds for payroll,” the company said. |
| A spokesman for Quantum Corporation, another publicly traded recipient mentioned by Mr. Clyburn, said that it would “demonstrate why Quantum not only falls within the technical eligibility requirements of the P.P.P. loan program, but also falls squarely within the spirit of what was intended by the CARES Act.” | A spokesman for Quantum Corporation, another publicly traded recipient mentioned by Mr. Clyburn, said that it would “demonstrate why Quantum not only falls within the technical eligibility requirements of the P.P.P. loan program, but also falls squarely within the spirit of what was intended by the CARES Act.” |
| The Treasury has been the subject of intense lobbying for changes to the program. Mr. Mnuchin believes his hands are largely tied by the intent of Congress to ensure that most of the money is directed toward keeping workers on payrolls. But he raised hopes this week in a CNBC interview that there could be adjustments to give the restaurant industry more flexibility over how and when restaurants spend the loan money. | The Treasury has been the subject of intense lobbying for changes to the program. Mr. Mnuchin believes his hands are largely tied by the intent of Congress to ensure that most of the money is directed toward keeping workers on payrolls. But he raised hopes this week in a CNBC interview that there could be adjustments to give the restaurant industry more flexibility over how and when restaurants spend the loan money. |
| “Many restaurants have just been sitting on their loans,” said Sean Kennedy, a spokesman for the National Restaurant Association. | “Many restaurants have just been sitting on their loans,” said Sean Kennedy, a spokesman for the National Restaurant Association. |
| Mr. Mnuchin is also under pressure from lawmakers to use his regulatory power to make lenders prioritize underserved borrowers such as women and minorities. A report by the Small Business Administration’s inspector general said those borrowers were getting insufficient access to loans. | Mr. Mnuchin is also under pressure from lawmakers to use his regulatory power to make lenders prioritize underserved borrowers such as women and minorities. A report by the Small Business Administration’s inspector general said those borrowers were getting insufficient access to loans. |
| The Trump administration has also faced criticism for a rule that has prohibited some people with criminal records from getting loans. | The Trump administration has also faced criticism for a rule that has prohibited some people with criminal records from getting loans. |
| Senator Cory Booker, Democrat of New Jersey, raised the issue with Mr. Mnuchin during a call with the Small Business Committee last week, according to a Senate aide, who said Mr. Mnuchin was receptive to easing the restrictions that have led to rejections of applicants who have felonies on their records from the last five years. | Senator Cory Booker, Democrat of New Jersey, raised the issue with Mr. Mnuchin during a call with the Small Business Committee last week, according to a Senate aide, who said Mr. Mnuchin was receptive to easing the restrictions that have led to rejections of applicants who have felonies on their records from the last five years. |
| The rocky rollout of the program has put its future in doubt. While about $540 billion of the $660 billion in loan money has been allocated, Congress does not appear eager to refill the pot and there are signs that the strings attached to the loans are starting to slow applications. | The rocky rollout of the program has put its future in doubt. While about $540 billion of the $660 billion in loan money has been allocated, Congress does not appear eager to refill the pot and there are signs that the strings attached to the loans are starting to slow applications. |
| Asked about waning demand, Senator Marco Rubio, a Republican from Florida who chairs the Small Business Committee, said uncertainty surrounding the rules was a factor, as well as some independent contractors not realizing their eligibility. | Asked about waning demand, Senator Marco Rubio, a Republican from Florida who chairs the Small Business Committee, said uncertainty surrounding the rules was a factor, as well as some independent contractors not realizing their eligibility. |
| Mr. Weinstein, the Ark Restaurants executive, said that while some companies might have misused the program, small public firms like his should not suffer as a result. | Mr. Weinstein, the Ark Restaurants executive, said that while some companies might have misused the program, small public firms like his should not suffer as a result. |
| “It’s sort of been poisoned by certain companies that have taken advantage where they shouldn’t have taken advantage, but we have a need,” he said. “We’re out of business without that money.” | “It’s sort of been poisoned by certain companies that have taken advantage where they shouldn’t have taken advantage, but we have a need,” he said. “We’re out of business without that money.” |
| Emily Cochrane contributed reporting | Emily Cochrane contributed reporting |