Some small companies could get second US relief loan: Mnuchin

[NEW YORK] Businesses suffering the most from the coronavirus crisis could receive a second round of financing under a federal emergency relief program, US Treasury Secretary Steven Mnuchin said Friday.

He said sectors that have been especially battered such as travel and restaurants are prime candidates for another round of support under the Paycheck Protection Program, which was launched in April to provide support to smaller enterprises devastated by coronavirus shutdowns.

"There should be a second check available to the businesses that are the hardest hit," Mr Mnuchin said in testimony before a House committee, noting the government has US$130 billion in unspent PPP funds.

However, he said he favoured a revenue test to determine which companies should be supported and pledged to work with Congress to determine the size of company eligible for a second round of financing.

Mr Mnuchin is leading the effort to negotiate a new support package with the Democratic-led House of Representatives as the coronavirus outbreak worsens in much of the country.

Hanging in the balance is US$600 a week in additional unemployment benefits that is set to expire at the end of July. Economists have credited massive federal support programs with limiting the hit to households from the Covid-19 crisis thus far, even as 15 million workers remain jobless.

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The House in May approved a new US$3 trillion aid package, but Senate Republicans and the White House refused to support that plan, and reportedly favour a payroll tax cut which would help only those currently receiving a paycheck.

While the PPP forgivable loan program has been credited with saving millions of jobs, the program suffered a glitchy rollout and has been a subject of myriad controversy, most recently over loans to politically-connected figures and businesses connected to billionaires like Kanye West.

Even with the latest data releases from the Small Business Administration, several lawmakers said Friday the program continued to fall short of adequate transparency, including of a breakout of loan data by borrower demographics.

Asked about news reports that showed few PPP loans went to minority-owned businesses Mr Mnuchin said he backed boosting funds for minority-owned small businesses but declined to embrace a target.

Mr Mnuchin said loans to politically-connected figures such as President Donald Trump's lawyer and businesses tied to members of Congress reflected decisions by legislators who did not require a review for conflict of interest on the PPP.

Democratic Representative Nydia Velazquez said, "I will insist on that going forward."

AFP