Mike, I am one of your biggest fans; however, I find the references to the Paycheck Protection Program (PPP) above to be tone deaf to what the true small business owner is experiencing.
Supposedly the PPP was a first-come, first-served program to protect small companies and their employees. The way it is being administered is egregious if it is anything like what my 29-year-old son experienced.
He and a college roommate own a metal fabrication and welding business that they started in 2015. They had five employees.
He applied to Pittsburgh National Corporation PNC, his banker, on the day that the program opened. Four days later, the banker at PNC contacted him to say that my son had not initialed the application in two places. He did so within three hours.
When he did not hear back from PNC on the status of his application, he contacted the banker repeatedly. No response at all until last Thursday, April 16, 2020, when the banker contacted him and said that she had submitted his application that day at 12:30 pm. The money had run out.
He had to furlough all of his employees. Now he is frantic to keep his business afloat.
He submitted a complaint to PNC and the banker called and offered him a loan at 7%. He has avoided debt like the plague. He and his partner have paid themselves paupers’ wages, believing that investing in equipment and good employees now would pay off in the future.
If he had not acted in a timely manner, he would not be upset. BUT when he did everything in time to get a loan and the "big guys" get funding and you didn't, it feels like crony capitalism at its worst.
Whom does he blame? Trump and Marco Rubio. Somebody had to write and approve the bill. He believes that they left loopholes for the banks and the connected.
RELATED READING: Just stop with the class warfare rhetoric on "CARES" Act and PPP
From the Gov:
Thank you so much for writing, Judith. I certainly don’t mean to be tone deaf about the real-world problems faced by small business owners; that’s why I’m highlighting your letter. As I said, this is the sort of bureaucratic nightmare that is common to virtually ALL government programs. It angers me to hear this story and think that loopholes might have been deliberately left in the bill to benefit the connected and savvy over independent small business owners such as your son who don’t have high-priced attorneys to make sure every “i” is dotted and every “t” crossed (and every blank initialed) on every page of the voluminous paperwork.
It’s hard to know exactly what happened here; did the banker deliberately set aside your son’s application in deference to more “important” applicants, or did his paperwork get lost in the shuffle of a deluge of applications. Either way, it’s unacceptable.
But the fact that all the money was gone so quickly underlies the need to end the political bickering and bargaining and replenish those funds NOW. I’ve been hearing economists say that even this infusion of $$$ is not going to be nearly enough, and they are worried. (It should worry us all.) As for your son’s bank, they should be apologizing profusely for delaying his application. They have the completed paperwork now, so as soon as more money is available, he needs to be AT THE HEAD OF THE LINE. If that doesn’t happen, I have two words for him after the crisis is over: “new bank.”
On the other hand, just a few moments ago (this is Monday afternoon), my researcher heard a report of a major, MAJOR financial institution being “out of money” for small businesses who were similarly right there with their applications on the very first day. Had it all been earmarked for big-deal clients? We’ll be looking into this. And when Congress (finally) approves more funding for the program, they might also want to take a look at how the program is already being abused and quickly close those loopholes. Emphasis on the word "quickly."
Thanks again, Judith, for your perspective. I hope your son gets the money in time to keep his business together and that he and his employees are able to get back to work soon. I’m not sure how shutting down a metal fabrication/welding plant with five employees (or any number, really, as long as they’re taking basic precautions) is going to affect the spread of coronavirus one way or the other.