The next big mess.

[Torus34]

Information's still a tad scarce, but the actual administration of the small business loans in the $US2.2T relief package isn't going all that smoothly. There may also be interesting differences between what was promised and what is actually delivered.

Stay tuned ...

PS. The mailing of individual relief checks may also be somewhat slower than originally indicated by the Administration.

 

[Torus34]

Administrator: Please move the OP to 'General Political Discussion' section. Posted in this section by error.

Thank you.

 

[ttwtt78640]

Information's still a tad scarce, but the actual administration of the small business loans in the $US2.2T relief package isn't going all that smoothly. There may also be interesting differences between what was promised and what is actually delivered.

Stay tuned ...

PS. The mailing of individual relief checks may also be somewhat slower than originally indicated by the Administration.

One big problem seems to be that 75% of the money must be spent on retaining labor in order for the "loaned" money to become a grant. That seemed wonderful to congress, but is an unrealistic operating cost profile for most small businesses. They did not operate that way when the were running and surely can't automagically do that now.

Another problem is that many had already laid off their employees which are now getting very generous UI benefits (with the extra federal $600/week bump, likely more than they were getting while working). To pay them less (using PPP funds) would not be doing them any favors - which was allegedly the intent of PPP in the first place

 

[Helix]

if the businesses can't manage to spend the freshly printed money on salaries, they can do without it.

 

[bluesmoke]

Information's still a tad scarce, but the actual administration of the small business loans in the $US2.2T relief package isn't going all that smoothly. There may also be interesting differences between what was promised and what is actually delivered.

Stay tuned ...

PS. The mailing of individual relief checks may also be somewhat slower than originally indicated by the Administration.

The question is how much of this loan company actually goes to small business and in what size range is the mode of loans. As a rule of thumb, most companies with less than 500 employees is considered a small business, though the range is 100 - 1,500 depending on the category of business operation. And, franchises are considered a small business so that the likes of a McDonalds franchisee that is able to continue doing take-out business because though traffic is down, they're getting money from a fed loan, than McDonalds Corp gets a share of that franchisee revenue it otherwise would not get. As far as I'm concerned, IMO, a large corp is getting the benefit of that "small" business loan.

 

[bluesmoke]

One big problem seems to be that 75% of the money must be spent on retaining labor in order for the "loaned" money to become a grant. That seemed wonderful to congress, but is an unrealistic operating cost profile for most small businesses. They did not operate that way when the were running and surely can't automagically do that now.

Another problem is that many had already laid off their employees which are now getting very generous UI benefits (with the extra federal $600/week bump, likely more than they were getting while working). To pay them less (using PPP funds) would not be doing them any favors - which was allegedly the intent of PPP in the first place

Funny how so many think business should be getting the money straight-on with no obligation to the employee and that the avg American shouldn't get anything that has the slightest appearance of an advantageous break (giveaway) but think it's just fine to give huge, advanatageous tax break giveaways, the largest in history, to the rich and large corps.

 

[ttwtt78640]

Funny how so many think business should be getting the money straight-on with no obligation to the employee and that the avg American shouldn't get anything that has the slightest appearance of an advantageous break (giveaway) but think it's just fine to give huge, advanatageous tax break giveaways, the largest in history, to the rich and large corps.

The PPP had to be spun as helping the employees, which keeping their employers from going out of business surely does, but it makes no sense to have a business which had 45% labor costs when it was running to have to "fake" having 75% labor costs to get the intended federal assistance.

Many of these businesses won't survive long if they can't pay their leases/mortgages, utility bills and be able to replace any perishable inventory lost when (if?) they plan to reopen. As I said before, their laid off employees can actually do better with the federally enhanced UI benefits than being forced to take the (often lower) employer's PPP funding.

 

[Mycroft]

One big problem seems to be that 75% of the money must be spent on retaining labor in order for the "loaned" money to become a grant. That seemed wonderful to congress, but is an unrealistic operating cost profile for most small businesses. They did not operate that way when the were running and surely can't automagically do that now.

This relief money was never intended to be "relief for the business". It's relief for the employees. The money isn't intended to replace revenue, out of which the employees get their paycheck. It's intended to provide the paycheck...and a little bit for the business to use on other bills.

Another problem is that many had already laid off their employees which are now getting very generous UI benefits (with the extra federal $600/week bump, likely more than they were getting while working). To pay them less (using PPP funds) would not be doing them any favors - which was allegedly the intent of PPP in the first place

This is a big, valid point and we can thank the Congressional Dems for this. They are the ones who insisted on the extra money from unemployment. The solution is to not give the workers a choice. If their former employer calls them up and offers their job back...they MUST take the job. Unemployment ends.

 

[Lutherf]

Information's still a tad scarce, but the actual administration of the small business loans in the $US2.2T relief package isn't going all that smoothly. There may also be interesting differences between what was promised and what is actually delivered.

Stay tuned ...

PS. The mailing of individual relief checks may also be somewhat slower than originally indicated by the Administration.

The rollout of the EIDL is likely to have a lot of people ticked off. The guaranteed advance of $10k has been changed midstream to $1000 per employee up to a maximum of $10k.

 

[washunut]

if the businesses can't manage to spend the freshly printed money on salaries, they can do without it.

I wish people on this site would not be glib about the plight of others. For many businesses that are shuttered through no fault of their own salary does not amount to 75% of their monthly expenses. Many have put their life's savings and many hours of sweet equity into their businesses. They are going broke because of an uncontrollable virus.

I am not Christian, for those who are today is a special day. I would hope they would think of others in a more thoughtful way every day but especially today.

 

[Helix]

I wish people on this site would not be glib about the plight of others. For many businesses that are shuttered through no fault of their own salary does not amount to 75% of their monthly expenses. Many have put their life's savings and many hours of sweet equity into their businesses. They are going broke because of an uncontrollable virus.

I am not Christian, for those who are today is a special day. I would hope they would think of others in a more thoughtful way every day but especially today.

I'm sad about that. However, I have nearly gone broke due to grants not being renewed, sequesters, and economic collapses caused by greedster gambling idiocy. Spend salary money on salaries. If we decide to print money for other things, then do that. Goodness knows that we've printed plenty of money for corporations, so maybe small business owners should get a chunk.

 

[Eriech]

It really contingent on whether we go back to work by May 1. If we don't we will be Venezuela by Memorial Day.

Economic Illiterates Are Running Amok

Sent from my SM-G892A using Tapatalk

 

[ttwtt78640]

1) This relief money was never intended to be "relief for the business". It's relief for the employees. The money isn't intended to replace revenue, out of which the employees get their paycheck. It's intended to provide the paycheck...and a little bit for the business to use on other bills.



2) This is a big, valid point and we can thank the Congressional Dems for this. They are the ones who insisted on the extra money from unemployment. The solution is to not give the workers a choice. If their former employer calls them up and offers their job back...they MUST take the job. Unemployment ends.

1) Relief for the laid off employees is what UI is for. As noted, that is (likely to be) less than state UI with the federal bonus. The "little bit" for other bills makes all the difference whether those "retained" employees still have a job in a month or two or simply had a former employer.

2) Agreed, but many (if not most) congress critters never read the bill and just voted "all in" based on the title, summary or general herd mentality of supporting what party leadership said was the right thing to do. As with many of these "must pass", pork laden, package bills it's easy for any congress critter to (later) say that parts A, Q and Y were "absolutely necessary" and the rest of the alphabet parts were "reluctantly accepted for bipartisan compromise".

 

[washunut]

I'm sad about that. However, I have nearly gone broke due to grants not being renewed, sequesters, and economic collapses caused by greedster gambling idiocy. Spend salary money on salaries. If we decide to print money for other things, then do that. Goodness knows that we've printed plenty of money for corporations, so maybe small business owners should get a chunk.

I am talking about loans to small businesses in my response. Solely that. It was my understanding that was what the thread was about. If not,I apologize.