PPP loans over $2 million will be audited – Mnuchin

Companies taking loans of more than $2 million from the Paycheck Protection Program can expect to get audited, Treasury Secretary Steven Mnuchin said Tuesday.

The program, created as part of the CARES Act to help small businesses keep workers employed, allows for loans to be forgiven if spent on payroll and other qualified expenses.

An initial $349 billion slotted for the program ran out in less than two weeks, and Congress added $310 billion more, which became available Monday.

Responding to criticism that larger companies with access to other types of credit were taking advantage of the program while smaller firms were shut out, Mr. Mnuchin said Tuesday in a televised interview that he will shortly announce "that for any loan over $2 million, the Small Business Administration will be doing a full review of that loan before there is loan forgiveness."

Mr. Mnuchin also said that the burden to prove a loan is necessary rests with applicants, not lenders."It's the borrowers who have criminal liability if they made this certification and it's not true," Mr. Mnuchin said. "The certification was very clear in saying that if people had other sources of liquidity, they could not take this loan."

Concern about the program led Sen. Elizabeth Warren, D-Mass, to ask the Small Business Administration's inspector general to investigate how it is being implemented.

A separate Payroll Support Program for passenger air carriers has already disbursed $12.4 billion in initial payments to 93 air carriers and will continue to make additional payments on a rolling basis, Treasury reported Monday. All funds provided under the Payroll Support Program can only be used for employee wages, salaries and benefits, and Treasury officials are finalizing similar payments for cargo airlines and contractors.