The paycheck protection program was meant to help struggling small businesses hit by COVID-19. Instead, a lot of the money went to those with the best relationships—not the neediest or most deserving
posted online that it got 75,000 applications from its own business banking customers in the first hour after its first cursory application went live on Friday April 3rd. On the following Monday, as it digested guidance from the SBA, it put up a new more detailed application form requiring more documents, including the IRS Form 941 submitted with payroll taxes. As it worked through problems we “looked to keep people in the same general order they had come to us” on April 3rd, the bank said.
A path towards greater equality might be as simple as appropriating more of the second round of loans to small community development financial institutions or CDFIs. These local banks are more likely to have ongoing relationships with small neighborhood businesses than mega-banks like JPMorgan Chase or Citi.
To be fair, some PPP recipients are both worthy — and well-connected. Before the coronavirus struck, the 120-person travel booking site Hotelplanner.com was on pace for $50 million in net revenues this year. “Business is down over 90%,” reports Chief Operating Officer Bruce Rosenberg. That makes the West Palm Beach, Fl.-based company specializing in group bookings , a seemingly-deserving PPP loan candidate.
There are other factors in play besides sheer favoritism. Cabbabe and others note that it was harder for banks to lend to non-customers because the government didn’t waive anti-money laundering “know your customer” rules for the PPP lending race.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Coronavirus antibody tests are almost impossible to get. Meet three L.A. residents who got themWith antibody testing still relatively hard to obtain, The Times spoke to three Angelenos about what it’s like to get access to this coveted product
Read more »
Need Cash Now? 5 Options To Access Cash In A Coronavirus EconomyCredit card cash advances come laden with fees and high interest rates and should only be considered as a last resort. Turn to personal loans and other strategies instead for more affordable options.
Read more »
Need Cash Now? 5 Options To Access Cash In A Coronavirus EconomyCredit card cash advances come laden with fees and high interest rates and should only be considered as a last resort. Turn to personal loans and other strategies instead for more affordable options.
Read more »
Governors say Trump continues to be wrong on coronavirus testingPresident Trump is pushing for the the U.S. to reopen amid the coronavirus pandemic. But state leaders say coronavirus testing lags too far behind.
Read more »
'All money is not good': Atlantic City mayor says opening economy too early would be 'senseless'WATCH: 'All money is not good money,' says Atlantic City Mayor Small. 'Our economy will rebound. It would be senseless to open up the economy and let people come here from all over ... in our casinos, in our businesses, and this virus isn't under control.'
Read more »