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Under the Trump administration's reopening plan, three types of businesses are called out for the strictest regulation: 1) large venues like sit-down dining, movie theaters, sporting venues, places of worship, 2) bars, 3) gyms. Yet these are among the least helped by PPP...
Accommodation and food services got fewer loans than construction, manufacturing, healthcare, and professional/scientific services. Arts/entertainment/recreation is near the bottom of the list
What is happening here is the industries that are being hit the hardest, and will be most strictly regulated in an ongoing way, are receiving the least help because of how PPP is designed. This is setting us up for a huge wave of small business failures in these industries.
The design of PPP by itself clearly favored industries that were going to maintain payrolls regardless, eg the least affected. And now we have the data and we can see this is clearly what is happening. Something has got to give here, and more money into PPP will not do it.
The Trump administration's guidelines make clear what was already suspected: a handful of industries are going to be regulated into low capacity for some time. This is on top of the underlying decline in demand from virus risk, which is also going to be significant.
My proposal with @LettieriDC could be targeted to these industries that are specifically being asked to stay far below capacity in an ongoing way. https://eig.org/news/main-street-rescue-and-resiliency-program This would lower operating expenditures ongoing & make lower capacity viable for however long its needed
Last thing: saving the hundreds of thousands of small businesses in these industries is a huge challenge, and it can't be accomplished as a bank shot & secondary outcome of a program whose primary purpose is retaining payrolls for obviously viable businesses.
