The New York Times says Small-Business Relief Effort 'a Mess'
The Hill says Small businesses still struggling for loans even as $100B is approved
The Trump administration has approved roughly $100 billion of the $350 billion allocated for emergency loans to small businesses devastated by the coronavirus outbreak, Treasury Secretary Steven Mnuchin told lawmakers on Wednesday.
But the figure has done little to ease the rising fears of smaller businesses still struggling to access the funds — and growing ever-more concerned that the program is tilted in favor of larger enterprises with existing relationships with banks.
The concern from small businesses is simple: they fear the money will run out before they can access it.
"A lot of money [is] first-come, first-serve, and many unbanked people who are underbanked or unserved ... don't have banking relationships, sophisticated in a way that others do," House Speaker Nancy Pelosi (D-Calif.) said Wednesday in an interview with NPR.
Money Might Run Out
Let's tap into that idea that money might run out with an investigation of the Small Business Loan Rules.
?The program offers loans of up to $10 million to cover eight weeks of payroll plus some additional expenses, like rent and utilities.
The loan can effectively turn into a grant. Most, and in some cases all, of the loan will be forgiven if a company uses the money to retain workers or hire back positions it had to cut. The S.B.A. has waived many of its usual requirements for these loans and will not require collateral for them.