Entertainment
Lifestyle
Business
Sports
Health
Politics
Blockchain
Facebook
Twitter
Google
LinkedIn
YouTube
Dribbble
South Asian Insider
Home
India
South Asia
International
Videos
Picture Gallery
Epaper
Latest Epaper
Old Issues
View Details
<< Back
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.
ENTERTAINMENT
LATEST UPDATES
Court-appointed committee a non-starter
The only issue over which there is a deadlock is the demand for repeal of the laws. The special committee cannot hear the two sides on this issue. The...
'Deep displeasure': India sends a stinker to WHO's Tedros over India's map
The 8 January letter is the third communication to the World Health Organisation in a month, reminding Tedros and his office to fix the maps (News ...
Farmers' protest: Youth Congress collects soil for India's map as a tribute
During the campaign from Kashmir to Kanyakumari, the soil will be collected, especially from villages and home towns of the 65 farmers, who have lost ...
Trump impeachment risks bogging down early days of Biden presidency
The prospect of Donald Trump facing a bitter impeachment trial in the US Senate threatens to cast a shadow over the earliest days of Joe Biden’s pres...
Vice President Pence, remove Trump now
What more does it take? President Donald Trump has brought the country to depths of division, unrest and instability that once would have been unthink...
HC asks RBI, SBI to maintain status quo on accounts of three Anil Ambani-led firms
The Delhi high court on Wednesday directed the State Bank of India (SBI) and the Reserve Bank of India (RBI) to maintain status quo concerning the ac...
For SpaceX Mission, Says He's "Excited, Honoured"
Raja Chari, 43, will serve as the commander while NASA's Tom Marshburn will be pilot and ESA's Matthias Maurer will serve as a mission specialist for ...
North Korea is going to be a major headache for whoever wins the US election
(News Agencies)- As Barack Obama ended his 75th day as President of the United States, the engines of a massive North Korean rocket roared to life ha...
Let it remain free country: SC after police summon woman over Facebook post
The woman had shared a crowded Raja Bazar area scene of Kolkata and questioned the Mamta Banerjee government's seriousness to enforce the lockdown. ...
India, US call on Pakistan to take immediate and irreversible action against terrorism
Besides China's aggressive actions across the region and beyond, counter-terrorism was part of the discussions between external affairs minister S Jai...
Advertisements