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1. In this thread I'm going to talk about the problems with the Paycheck Protection Program (forgivable loans to small businesses)
The Trump administration launched the $350 billion program on Friday and the rollout has been a cluster https://popular.info/p/failing-small-business
The Trump administration launched the $350 billion program on Friday and the rollout has been a cluster https://popular.info/p/failing-small-business
2. First, 25% of all small businesses temporarily closed (as of April 3). More are on the brink.
$350 billion isn't enough.
So we are left with a Lord of the Flies situation, many thousands of businesses competing for limited resources. https://popular.info/p/failing-small-business
$350 billion isn't enough.
So we are left with a Lord of the Flies situation, many thousands of businesses competing for limited resources. https://popular.info/p/failing-small-business
3. The Small Business Administration is badly underresourced and so it can't directly administer the loans.
So it routes the loans through banks.
But many banks are giving preference to their existing loan customers. Banks are effectively using taxpayer dollars as a perk.
So it routes the loans through banks.
But many banks are giving preference to their existing loan customers. Banks are effectively using taxpayer dollars as a perk.
4. The people who need the help the most, cash-based small businesses without an existing banking relationship, are now at the back of the line.
By the time they find someone who will work with them, the money might be gone. https://popular.info/p/failing-small-business
By the time they find someone who will work with them, the money might be gone. https://popular.info/p/failing-small-business
5. The Trump administration also didn't issue guidance until the night before the program was slated to launch, and when they did it was ambiguous and confusing. Then the website used to process the loans went down for 4 hours on Monday.
These businesses don't have extra hours.
These businesses don't have extra hours.
6. Mnuchin now seems to realize there isn't enough money and has requested Congress to allocate $250 billion more. But the Senate is out of session until April 20, so it's tricky to get that done. https://popular.info/p/failing-small-business
7. Larry Kudlow is Trump's chief economic advisor and a millionaire. He reports that his wife is a painter and had no problem applying for some of this money, which is supposed to go to struggling businesses.
So there is nothing to worry about. https://popular.info/p/failing-small-business
So there is nothing to worry about. https://popular.info/p/failing-small-business
