(CNBC) The Small Business Administration said Friday that hedge funds and private equity firms are ineligible for the small business relief program.
The move comes after reports that hedge funds had applied for the first round of the Paycheck Protection Program. That fed into a public backlash after the program’s initial $350 billion was quickly exhausted and it was revealed that big public companies, rich universities and large restaurant chains had tapped the PPP.
“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 an update posted online. “The Administrator, in consultation with the 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.”
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