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New guidance on SBA loans means most startups are still excluded from $349 billion stimulus

Under new guidance issued by the Small Business Administration it seems non-profits and faith-based groups can apply for the Paycheck Protection Program loans designed to keep small business afloat during the COVID-1 9 epidemic, but most venture-backed corporations are still not covered.

Late Friday night, the Treasury Department updated its rules regarding the ” relationship” of private entities to include religious groups but keep in place the same rules that would deny most startups from receiving loans.

( b) If you are a faith-based organization,* no affiliation rules apply to you ,* because the SBA just said so. Out of nowhere. At like 10 pm on a Friday night.

It doesn’t affair if you have a zillion works; as long as any 1 entity has <500 employees, it can get a #PPPloan.4/ pic.twitter.com/V0x3Vx6G7x

— Doug Rand (@doug_rand) April 4

The NVCA and other organizations had pushed Treasury Secretary Steve Mnuchin to clarify the rules regarding startups and their potential eligibility for loans last week. And House Republican leader Kevin McCarthy even told Axios that startups would be covered under the revised regulations.

Apparently that didn’t happen

2/ There are rumors that the PPP Loan program may still fix the Affiliate Rule next week. Until fixed

— Mark Suster (@msuster) April 4

At its essence

“”[If] there’s a startup that’s going gangbusters right now

The $2 trillion CARES Act passed by Congress and signed by President Trump was designed to help companies that are adversely affected by the economic fallout resulting from the COVID-19 outbreak in the US and their employees — whether those businesses are directly affected because their employees can’t leave home to do their jobs or indirectly

While some tech startups have seen demand for their products actually rise during these quarantined days

The sense frustration among investors across the country is palpable. As the Birmingham-based investor

After 4 days of trying to help 7 small businesses navigate the @SBAgov PPP program

— Matt Hottle (@MattRedhawk) April 4

And although the rules around whether or not many startups are eligible remain unclear

General Catalyst is advising its companies that are also backed by SBIC investors to apply for the loans

And there’s already concerns that the money could run out. In a tweet

I will immediately ask Congress for more money to support small businesses under the #PPPloan if the allocated money runs out. So far

— Donald J. Trump (@realDonaldTrump) April 4

“”Congress saw fit to allow Darden to get a forgivable small business loan–actually a taxpayer-funded grant–for like every Olive Garden in America. But Congress somehow neglected to provide comparable rescue measures for actual small businesses that have committed the sin of convincing investors that they have the potential to employ a huge number of people if they can only survive

Read more: feedproxy.google.com

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