Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Venture capital-backed startups will become eligible for $350 billion in small business loans guaranteed by the federal government, House Minority Leader Kevin McCarthy (R-Calif.) told the Axios Pro Rata Podcast on Thursday: "I just got off the phone with Treasury Secretary Mnuchin and this is going to be solved."
In context: The Paycheck Protection Program, which provides forgivable loans of up to $10 million for companies with fewer than 500 employees, was included in the $2 trillion stimulus plan passed last week. But it also maintained something called the "affiliation rule" for most applicants, which likely excluded many small businesses that count venture capitalists among their shareholders.
- McCarthy and House Speaker Nancy Pelosi (D-Calif.) have in recent days pushed for the Treasury Department to issue guidance easing the affiliation rule.
- McCarthy says that in the next day or two, Treasury will release guidance that sets a simple guideline for PPP loan eligibility.
- If a small business is not controlled by a single outside shareholder, it would be eligible.
Between the lines: This does leave out possibly thousands of private equity-owned small businesses. McCarthy says there could be future efforts, or maybe even a subsequent piece of legislation, to address such companies, but for now he and Mnuchin agreed that "control" is the simplest and fairest way to determine eligibility.
Go deeper: Bipartisan push could save private equity-owned small businesses