Hedge Funds Ineligible for Paycheck Protection Program Loans

Posted on April 27th, 2020 at 5:12 PM
Hedge Funds Ineligible for Paycheck Protection Program Loans

From the Desk of Jim Eccleston at Eccleston Law LLC:

The Paycheck Protection Program (“PPP”), which was supposed to provide forgivable loans to small businesses, has come under fire after it came to light that large, publicly traded companies had received loans through the program.  Potbelly, Shake Shack and Ruth’s Hospitality Group, the parent company of Ruth’s Chris Steak House, eventually announced they would return the loans after facing public backlash. Potbelly and Shake Shack each received $10 million from the PPP, while Ruth’s Hospitality Group received $20 million. 

The Small Business Administration (“SBA”), the agency that oversees the PPP, announced that hedge fund firms and Private equity firms will not be eligible to receive PPP loans. The SBA decided that hedge funds were ineligible to receive PPP loans because they are primarily engaged in speculative investing.  This announcement from the SBA comes as the agency tries to tailor the program to get loans to the small businesses that were the intended recipients. 

The PPP received an additional $310 billion in funding after the initial funding was exhausted.

The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities FraudCompliance ProtectionBreach of Fiduciary DutyFINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

Tags: eccleston, eccleston law, james eccleston, legal trouble, litigation, financial advisorhedge funds, ppp, forgivable loans

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