Problems with the Payroll Protection Program
By Stephen Behrends, Apr 11 2020 04:22PM
Problems with the Payroll Protection Program make it difficult for small businesses to count on these loans to save them
Here are some articles with information about the new SBA administered loan program for small businesses. These loans are supposed to turn into grants if they are used only for payroll, rent and utilities.
Just copy and paste them into your browser to see the articles.
First, here is a link with more information about how to apply for the loans:
But if you haven’t applied already, you may be waiting for the second round of funding. Everyone agrees that more money is needed but it may be a while before it is authorized by Congress:
Banks have been warning of overwhelming demand for the loan. In addition, they are complaining of inadequate guidance from the Treasury Department and the SBA about how the loans are to be processed.
Other big problems are that many rural areas don’t have banks that are usually involved in SBA loans and the bigger banks are limiting participation to existing customers. People are reporting that banks have cut off the loan applications after only two or three days.
Some are suggesting that the next round should be targeted to rural areas and to minority owned banks. Others think that at the same time this program is fixed, other problems with the CARES act should be fixed, such as inadequate assistance to hospitals and states that have been hard hit with the virus. Still others think that the whole idea of using the SBA and loans is misguided and that the Treasury Department should have been given the job of administering grants to businesses to meet payroll and other expenses.
There is little doubt that this program is in trouble and is inadequate to meet the needs of the country’s small business.