The Small Business Administration, the United States government agency that provides support to entrepreneurs and small businesses, said that hedge funds and private equity firms are not entitled to access grants under the Paycheck Protection Program (PPP), the economic stimulus package set up for small businesses in difficulty due to the coronavirus.
In recent weeks, some asset management companies had applied for access to the first round of 350 billion dollars. The package offers loans to cover payroll, rent and utilities for up to eight weeks.
The issue split public opinion between those who call investment companies morally incorrect, and those who argue that as small businesses these companies also face the same difficulties as other small businesses.
The Managed Funds Association opposed the use of loans, stating that PPP money is not intended for the general interests of hedge fund partnerships. The legislation remains unclear about hedge funds and private equity firms.