(Bloomberg) -- Private equity firms have been dealt a setback in their latest attempt to get companies they own access to billions of dollars of loans that the U.S. government is doling out to help small businesses hit hard by the coronavirus pandemic.
The next bill in the U.S. Senate doesn’t give the industry relief it has been seeking as lawmakers negotiate another round of economic stimulus, according to two people familiar with the matter who asked not to be named because the discussions are private.
Private equity has been lobbying aggressively in recent days to get Congress to clarify that portfolio companies controlled by the industry are eligible for the Small Business Administration loans.
The problem: In rules laid out by the SBA and the massive $2 trillion rescue bill that Congress passed last month, firms with more than 500 employees don’t qualify for the loans. That number counts affiliates –- a definition that could include the workers at all the portfolio companies that a private-equity firm invests in.
Senate Majority Leader Mitch McConnell on Thursday will try to unanimously pass a bill that simply reflects the White House request for more funding, without changing the program’s rules. Democrats have outlined several demands for the bill and so far have not sought the private equity changes.
Congress is expected to debate a wider stimulus package sometime after April 20 that will give private equity another chance to try access the program. In the meantime, lawmakers sympathetic to their complaints are trying to work with the administration on rules changes, said one of the two people.
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