Hedge funds and private equity firms are ineligible to receive loans geared toward small businesses included in coronavirus relief legislation, the Small Business Administration said Friday.
The latest relief package was signed into law Friday and added $310 billion to the Paycheck Protection Program, designed to help small businesses keep workers employed with loans that are largely forgivable. The original $349 billion slotted for the program ran out last week.
"Hedge funds and private equity firms are primarily engaged in investment or speculation, and such businesses are therefore ineligible to receive a PPP loan," the SBA said in a rule update. "The administrator, in consultation with the (Treasury) secretary, does not believe that Congress intended for these types of businesses, which are generally ineligible for section 7(a) loans under existing SBA regulations, to obtain PPP financing."