South Asian Insider
Disaster. Fiasco. Debacle.
Small Businesses Wait for Cash as Disaster Loan Program Unravels. PPP loan plan a mess so far for small businesses riding out coronavirus crisis. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress with overwhelming, bipartisan support and signed into law by President Trump on March 27th, 2020. It promised to provide fast and direct economic assistance for American workers and families, small businesses, and preserve jobs for American industries. This over $2 trillion economic relief package was supposed to deliver on the Trump Administration’s commitment to protecting the American people from the public health and economic impacts of COVID-19. Small Businesses Wait for Cash as Disaster Loan Program Unravels. PPP loan plan a mess so far for small businesses riding out coronavirus crisis. Banks warn additional $310 billion allocated for small businesses likely already used up New stimulus hasn’t even been passed by House yet, but backlog in applications likely to take up much, or all, of funds The CARES Act promised to provide fast and direct economic assistance for American workers and families, small businesses, and preserve jobs for American industries. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress with overwhelming, bipartisan support and signed into law by President Trump on March 27th, 2020. This over $2 trillion economic relief package delivers on the Trump Administration’s commitment to protecting the American people from the public health and economic impacts of COVID-19. That’s how the roll out of the Paycheck Protection Plan (PPP) was widely described. PPP is the loan program aimed at helping small businesses and the self-employed keep their employees paid through the coronavirus crisis, with loans that can be "forgiven" – in other words, turned into a grant. But frankly, it’s just a mess. As part of the CARES act passed in late March, Congress allocated $359 billion for small-business relief. PPP enables businesses to get loans of 2.5 times their average annual "payroll costs" and have those loans forgiven if they spend at least 75% of those funds on "payroll costs" within eight weeks. It’s designed to get paychecks to those working in small businesses quickly. It immediately became a very, very popular program. The Senate wanted these funds to go through banks instead of the Treasury Department or the SBA. This was supposed to get money to businesses faster. Instead, it created mass confusion and frustration. “Talk to 20 business owners, and they’re all hearing something different from their banks,” said Amanda Ballantyne, executive director of Main Street Alliance, representing more than 30,000 small businesses. Banks each have different online processes and require different documentation to meet federal guidelines. Most banks are accepting applications only from existing customers; at least one bank limits applications only to those with business accounts, wrongly shutting out those sole proprietors with only personal accounts. Most big banks have stopped accepting applications altogether, saying they’d reached their financial limit. Bank of America had received over $32 billion in applications. Websites crashed. Small-business owners were frustrated. Sole proprietors were perplexed. Everyone was angry. And that was just the first business day. Worse: Big businesses are actually able to take a big chunk of these funds supposedly set aside for small businesses and the self-employed. Hotel and restaurant businesses with fewer than 500 employees in one location also qualified for these funds – up to $10 million. Sole proprietors who do their own bookkeeping or small businesses fighting just to survive use the same applications and compete for funds with hotel or restaurant chains. Crazy. I have yet to hear of a small business whose owner has actually been told they’ve been approved or has received any money. There’s a little good news: The Treasury Department on Monday indicated they’d take these loans off the banks’ balance sheets, freeing up more funds from individual banks. But that doesn’t solve the problem of the pot running out. Because of demand, Treasury Secretary Steven Mnuchin said Tuesday he’d ask for $250 billion added to the PPP program. More money is desperately needed, but that won’t solve the program’s inherent problems. “It's not clear that putting more money into this program will actually solve the crisis that millions of small business owners are facing,” said Ballantyne. “The challenges with the PPP will be persistent.” A broader “CARES 2” package is already being discussed, and the idea has bipartisan support. I hope that in that package, America will get a real “Small Business Survival” program, not just a program to protect paychecks, including: • Grants, not just loans: Earlier proposals called for simple grants for the smallest companies – ranging from a maximum of $75,000-$100,000 for businesses with fewer than 50 employees. Let’s do something like that fast. • Simpler procedures: Why make these small companies jump through hoops and deal with paperwork when they’re fighting for survival? Sen. Josh Hawley, R-Mo., is proposing a simpler way to get money to small businesses through payroll rebates. This wouldn’t cover those businesses without W2 payroll workers, but it could make things easier for those who do. • Forgiveable loans for operating expenses. PPP requires at least 75% of funds to be used for "payroll costs." But many businesses have bigger operating expenses – rent, inventory, equipment leases, insurance and more. • Separate pots. Why have very small businesses compete with companies that have hundreds of employees? • Faster funds. Small businesses are closing for good every day. Let’s not waste time with a bunch of unnecessary limitations for very small companies. “This is a life or death situation for millions of small-business owners,” said Ballantyne.
PM Modi’s approval rating falls as India struggles to contain second Covid-19 wave: US firm
Approval ratings of PM Modi have fallen to a new low as India grapples with coronavirus pandemic, according to a US data intelligence company. Narendr...
International row created, Delhi ministers still insist Singapore Covid variant is real
Amidst the diplomatic storm that has ensued following Delhi CM Arvind Kejriwal’s claims of “Singapore variant” of Covid-19, Delhi ministers insist tha...
"India A Major Priority": US Yet To Decide On Allocation Of 80 Million Vaccine Jabs
A top US official said the allocation decision will be made on the basis of need and collaboration with key partners and COVAX. (Insider Bureau)-No...
Indian-Origin Chemist Among Tech 'Nobel' Prize Winners For Revolutionary DNA Technique
President of the Republic of Finland Sauli Niinisto, who is the Patron of the prize, presented the award to the scientists in a virtual ceremony on Tu...
No one wants to work anymore
The truth behind this unemployment benefits myth. * Millions of unemployed in US face hardship under Republican benefit cuts * At least 22 Republica...
Rajnath Singh asks Army to be on war footing in Covid battle, provide medical help across states
Defence Minister Rajnath Singh has urged the Indian Army to open up its medical facilities for civilians and asked top commanders in states to be in t...
Vaccine embargo: Why Modi needs to call Joe Biden
A US embargo on the export of raw materials could upset India's plans to ramp up its Covid-19 vaccination drive (Insider Bureau)--While the Centre...
As Sanjeev Gupta Rose From Trader to Tycoon, Several Banks Backed Away
Four banks stopped working with British industrialist Sanjeev Gupta's commodity trading business, starting in 2016, after alleged paperwork problems i...
‘’Enough Is Enough”: Relative Of Sikh Woman Killed In US FedEx Shooting
Brandon Scott Hole, 19, and a former employee at the facility in Indianapolis carried out the mass shooting on late Thursday before allegedly killing ...
US 'very closely' tracking course of Covid-19 outbreak in India
(Insider Bureau)-The United States is tracking the course of the COVID-19 outbreak in India "very closely", the State Department has said. The Center...
© All rights Reserved. The south Asian, Published Weekly from New york.