Sen. Elizabeth Warren (D-Mass.) and other progressives say private equity firms, which buy, sell and sometimes close companies in so-called leveraged buyouts, are harmful to workers and the economy — a theme that Warren hammered away at during her presidential campaign.

"Private equity has trillions of dollars of money waiting to be spent," said Marcus Stanley, policy director at Americans for Financial Reform. "So it takes real chutzpah for these Wall Street titans to now say they need government assistance."

The effort is the latest example of the lobbying juggernaut that has been sparked by the government as businesses seek to tap into trillions of dollars of federal aid intended to fend off an economic collapse caused by the coronavirus pandemic.

The target for Wall Street firms is the "Paycheck Protection Program," which lawmakers designed to ramp up the volume of government-guaranteed loans that banks can make available to businesses with fewer than 500 employees. A key feature of the loans is that they can be forgiven if a business keeps its workers.

Private equity and venture capital firms, which provide early funding for new companies to get off the ground, are worried that companies they own will be blocked from obtaining loans. That's because Small Business Administration rules calculate the aggregate number of employees for an enterprise seeking aid — meaning not just the individual small business but also other businesses in an investment firm's portfolio. That raises the risk that the smaller companies would breach the 500-employee threshold.

“Businesses across America are looking for support immediately in order to survive and continue to employ people," said Drew Maloney, who represents private equity industry titans such as Blackstone and the Carlyle Group as president and CEO of the American Investment Council. "It shouldn’t matter if these companies are backed by investments from corporations, pension funds or others. We’ll continue to work with the administration and Congress to request that federal programs support all businesses, regardless of ownership structure, and their workers.”

Several other groups are joining the cause. The Institutional Limited Partners Association, which represents large investors in private equity funds, warned the Treasury Department and the SBA that prohibiting the businesses from acquiring the loans would severely cut into returns that help fund pensions, insurance policies and other investments that Americans rely upon. Its members include the the California Public Employees' Retirement System and the Dallas Police and Fire Pension System.

"We see no reason why being owned in a fund structure should result in these businesses having less access to the capital needed to keep their employees on the payroll," said Steve Nelson, the association's CEO.

It's a hometown concern for California Democrats like Pelosi and Rep. Ro Khanna. In their own letter to Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza, they said the restrictions threatened Bay Area and Silicon Valley tech startups that have equity investors.

"We urge you to issue guidance as expeditiously as possible and to afford our nation's startups access to a critical source of credit in the coming months," they said.

The National Venture Capital Association in a letter with dozens of groups representing startups said the companies would have to halt critical research and development projects, "setting back our country’s competitiveness and delaying the creation of new tools to combat the Covid-19 pandemic."