Only 20 U.S. defense contractors consider $ 17 billion COVID-19 loan pool

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WASHINGTON (Reuters) – Fewer than 20 companies plan to apply for $ 17 billion in loans intended for relief funds for Pentagon vendors affected by the coronavirus pandemic, a Pentagon official said on Thursday.

The Pentagon has worked to shore up the finances of defense contractors who may have seen a decline in non-defense activities, as quarantine to prevent the spread of the novel coronavirus halted much of the l American economy.

“The challenge is that these $ 17 billion in loans come with some pretty invasive endorsements,” Ellen Lord’s principal arms buyer of the Pentagon told a Pentagon press conference on Thursday.

The US Treasury Department will seek stakes in publicly traded national security firms, including defense firms, which are seeking a portion of the $ 17 billion.

“For public companies, it may not be as interesting as it is for private companies, so this is one of the differentiators that I see,” Lord said.

According to the loan application, companies with Top Secret clearance working for the US government and others with contracts related to the Defense Production Act should submit a loan application by May 1.

Lord reported that the Treasury Department was looking for more ideas on what to do with the $ 17 billion set aside.

“What the Treasury has been very open to is how they should expand this.”

Reporting by Mike Stone in Washington, DC; Editing by Marguerita Choy

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