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+--- Thread: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted (/showthread.php?tid=240197)
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Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - Acer - 04-18-2020
Lots of rumors of Big Boys masquerading as smaller firms (every franchise storefront is its own small business!) and hedge funds (small staffs handling tens of millions of dollars!) to siphon off funds.
https://thehill.com/policy/finance/492919-small-business-loan-program-runs-out-of-funds-amid-debate-over-new-bill
My employer, a local non-profit with a dozen or so employees and taking a massive budget hit with closure of its public facilities and programs, got shut out. In a matter of hours.
Has our zeal to get cash into everyone's hands with a minimum of "wasteful" oversight only made the waste much worse?
Re: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - mattkime - 04-18-2020
>Has our zeal to get cash into everyone's hands with a minimum of "wasteful" oversight only made the waste much worse?
Well, it wasn't _everyone_ - just those first in line AND lucky
Re: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - Racer X - 04-18-2020
I waded through the mire and my business was funded. It wasn't until the money was almost gone that they realized that most went to a small percentage of businesses. The cap is 500 employees. Near the end, they focused on small grants. Too late.
there were some questions that didn't apply to me. I know one involved franchises.
If they refund it, I really hope they start at the small grants and work their way UP. I think the larger businesses have more options like loans etc.
This is from a Yahoo Finance article, lost the link "Three-quarters of the loans were for $150,000 and under. Four percent of the loans were for over $1 million, consisting of nearly 45 percent of the total money disbursed."
So 4% of the loans got 45% of the funds. That's the issue. There were exceptions to the 500 employees in several sectors, I think hospitality and construction.
Re: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - Michael - 04-18-2020
Last week I told a story of a law firm that was intending to get PPP money for all employees and also get it for partners. Somebody asked whether they made more than the $100,000 maximum. The answer was yes, they do, but they figured out a way to get it.
Last Monday the firm apparently filed for both the employees as well as the partners in separate filings. The IRS on Tuesday provided guidance that made the partners ineligible and so the partner applications were withdrawn. Good. But, they did receive the PPP money for employees.
This is a firm that has not and apparently will not lay off anybody. Their work continues unabated. The PPP money will simply replace salaries for staff and associates and the saved money will ultimately go into the pockets of the partners. They did buy laptops for staff who didn't own adequate personal computers and are apparently providing some sort of fast-enough internet access to those who don't have it at home, so they have had some COVID-19 related expenses. But, not lost employees.
I've not seen the PPP application, but if it is not explicit for laid-off workers, or at least having applicants certify a percentage of lost work (e.g. "our business is 30% in decline compared to April, 2019") and providing that percentage in benefits, then we're dramatically misusing these funds, in my opinion.
But, dramatically misusing taxpayer funds wouldn't surprise me in the least.
Re: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - Racer X - 04-18-2020
Incredibly easy to misuse the funds. I need to establish a clear "paper trail" to prove I used it for payroll for myself, then I can apply to have the debt forgiven.
The big issue is that the under 500 employees has exemptions for several industries like hospitality and construction. That's why so much of the money went to such a small number of businesses.
Re: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - Acer - 04-18-2020
Apparently those applying through small, regional banks had a better success rate. I don't know what that means, just a data point.
Re: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - Ted King - 04-18-2020
I saw a small business owner complaining that Chase bank was giving priority to businesses that had large loans that they owed to Chase over business owners who "only" had regular checking and savings accounts and no loans with them. I wonder why they would do that. :bunny:
Re: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - $tevie - 04-19-2020
When I heard that Ruth's Chris Steakhouse got $20,000,000 from that program, I knew it was crapola like that which sucked up all the funds.
Re: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - Acer - 04-20-2020
Ruth's Chris Steakhouse is, or was, a big right wing talk radio advertiser. (And coincidentally, a terrible name for speaking on the radio.)
Re: Maybe a little red tape next time? Small business paycheck protection loan funds quickly exhausted - $tevie - 04-20-2020
Public shaming can work sometimes:
Shake Shack returns $10 million emergency loan to the US government
https://www.cnn.com/2020/04/20/business/shake-shack-ppp-loan-sba/index.html