Many Wall Street hedge funds were criticized after they applied for bailouts meant for small businesses suffering from the economic impact of COVID-19. The Paycheck Protection Program (PPP) loans given by the U.S. Treasury Department are part of the historic U.S. stimulus package meant to prop the country's economy.

In many cases, hedge funds employ a small number of traders – in order to maximize profits - and therefore fit the Small Business Administration's (SBA) initial definition of a small business. But, after a fierce backlash, the SBA and Treasury announced that both hedge funds and private equity firms would be illegible to receive funds coming from the next round of funding. It's unclear how much of the initial $349 billion has been received by hedge funds or other types of financial firms.

Other businesses came under fire for tapping into the PPP, including Shake Shack and other national restaurant chains. Some, like Shake Shack and the parent company of Ruth's Chris Steak House, returned the loans after public backlash, but many other companies are refusing to pay back the loans, despite pressure from the White House. 

The U.S. government has announced the second round of PPP loans, to the tune of $320 billion. The initial April 3 fund of $349 billion dried up in just 13 days. 

Many small businesses accused big banks of catering to their larger clients and not following the government's 'first-come-first-served' guidelines. The SBA responded to complaints that large public corporations received funds which they should not have been qualified to receive. Companies may have to prove they needed the funds because of the outbreak, and can even return the money by May 7 without any consequence.

U.S. Treasury Secretary Steven Mnuchin warned that companies receiving over $2 million in funds would get an automatic audit. The PPP loans are to be forgiven if the company uses the money to keep employees on the payroll.

"Anybody that took the money that shouldn't have taken the money, one, it won't be forgiven and two, they may be subject to criminal liability, which is a big deal," Mnuchin said in a FOX interview. "I encourage everybody to look at this and pay back these loans now so we can recycle the money if you made a mistake.”

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