BOSTON (Reuters) – Hedge fund and private equity firms are not eligible for the types of U.S. government loans designed to provide relief to small businesses from the economic hardship of the coronavirus outbreak, the Small Business Administration said on Friday.

“Hedge funds and private equity firms are primarily engaged in investment or speculation, and such businesses are therefore ineligible to receive a PPP (Paycheck Protection Program) loan,” the SBA wrote in an update to clarify which businesses may apply for relief under the program.

The loans are designed to support smaller businesses ranging from hair dressers to restaurants to help cover employee payroll and rent as large swaths of the economy have been shut down to keep the virus from spreading.

There was speculation that some financial firms, had applied for the program, bankers and lawyers said, explaining that the firms consider themselves to be small businesses just like everyone else. Reuters has not been able to identify specific firms that may have asked for or received the loans.

Many Americans expressed anger that government aid might go to thee types of firms, sometimes run by billionaire founders who fly in private planes and can afford second and third homes in exclusive vacation enclaves.

Source: Read Full Article