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Illustration: Sarah Grillo/Axios

The Senate late last night passed a $2.2 trillion safety net for the American people and American businesses. But not all businesses were included. The package left out thousands of small companies owned by private equity firms.

Details: The legislation includes $350 billion in small-business loans for companies with fewer than 500 employees. That's a liberalization of typical SBA rules, which are more industry-specific in terms of employee number and revenue.

Yes, but: One rule that still applies is that private equity-owned companies are considered "affiliated" with all of the private equity firm's other portfolio companies.

  • That means if you have 300 employees but are owned by a private equity firm whose portfolio companies employ a total of 1,000 people, you don't qualify.

The same goes if a VC firm controls over 50% of a startup's voting stock, or if two or more VC firms combined "are large compared to other stock holdings."

  • Also left out are all cannabis-related companies, as they've historically been blocked from participating in SBA programs.
  • It's possible that there will be more lenient guidance added to deal with these exemptions, but it wasn't in the 800-plus pages voted on last night.

The new bill does have exemptions for small businesses in the restaurant, restaurant supply chain and hospitality sectors — plus some carve-outs for SBIC-backed companies.

How it works: The bill asks Treasury to establish a middle-market lending program for companies with between 500 and 10,000 employees, which potentially could help larger PE-backed companies. This is part of the broader $454 billion direct lending pool.

  • All direct loans would include several conditions while the loan is outstanding, including employment retention requirements, no dividends or stock buybacks, and no forgiveness.
  • The bill language says Treasury will "endeavor" to create the middle-market program, which seems a bit wishy-washy.
  • We still do not know how companies would apply for such loans, or any specific qualifying requirements besides employee number (kind of like the Fed's still-amorphous Main Street lending program, announced earlier in the week).

The bottom line: Most American businesses, small and big, were helped last night. But a wide swath of smaller, private equity-backed companies — everything from manufacturers to services companies to software providers — were forgotten.

Go deeper

1 hour ago - Health

Biden says it's "not the time to relax" after touring vaccination site

President Biden speaking after visiting a FEMA Covid-19 vaccination facility in Houston on Feb. 26. Photo: Mandel Ngan/AFP via Getty Images

President Biden said Friday that "it's not the time to relax" coronavirus mitigation efforts and warned that the number of cases and hospitalizations could rise again as new variants of the virus emerge.

Why it matters: Biden, who made the remarks after touring a vaccination site in Houston, echoed CDC director Rochelle Walensky, who said earlier on Friday that while the U.S. has seen a recent drop in cases and hospitalizations, "these declines follow the highest peak we have experienced in the pandemic."

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Annelise Capossela/Axios

  1. Health: Most COVID-19 survivors can weather risk of reinfection, study says — "Twindemic" averted as flu reports plummet amid coronavirus crisis
  2. Vaccine: FDA advisory panel endorses J&J COVID vaccine for emergency use — About 20% of U.S. adults have received first vaccine dose, White House says — New data reignites the debate over coronavirus vaccine strategy.
  3. Economy: What's really going on with the labor market.
  4. Local: All adult Minnesotans will likely be eligible for COVID-19 vaccine by summer — Another wealthy Florida community receives special access to COVID-19 vaccine.
  5. Sports: Poll weighs impact of athlete vaccination.

The week markets went wild

Illustration: Lazaro Gamio

The markets just closed out a manic week.

Why it matters: Outsized — and in some cases historic — moves were evident across the board.