APRIL 16, 2020

News Roundup for Small Business Owners

The latest news about relief efforts for small businesses, particularly via the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).

• Well folks, it’s about done. At least for now. The Wall Street Journal expects the PPP to be exhausted today. Certainly that doesn’t mean the money will be allocated by the end of today. Many clients we talk to heard they “received their PPP,” but have yet to see a promissory note or actually sign any documents. So even though the money is spoken for, it doesn’t mean your business is out-of-luck. Currently most of the already-received funding has come from community banks. The way I see it, politicians have a vested interest in making this program appear successful, so they are touting all the money that’s been committed, yet we all know that most businesses have yet to see any money. I expect that a lot of the committed aid is to large national banks and it’s just taking them a long time to roll out the funding. You know what they say about turning large boats. (Wall Street Journal)
• Will there be more money allocated for small business? My gut says yes, but who knows when. The impasse between the Democrats and Republicans appears no closer to resolution. Republicans want only the PPP re-funded; Democrats want aid for other relief programs (hospitals, food benefits, local governments, etc.). I feel like right now the Democrats have the leverage, but the urgency of the situation could change things quickly. (Politico)
• One item the Democrats are pressing is wanting to know who has benefitted from PPP, and whether that money is being used as expected. News reports are beginning to trickle out about who received money from the aid program. Ruth’s Hospitality Group and Potbelly Corp., two huge national chains, both reported receiving PPPs today. Both of these companies have thousands of employees, far exceeding the maximum of 500 that the program was intended to help. Moreover, these are restaurants who are unlikely to see staffing levels return to what they were pre-pandemic by June 1, so it is likely these companies will opt to not seek loan forgiveness and instead roll them over into very business-friendly 1% interest loans. Shameful. (Don’t get me wrong, I mean no ill-will towards the employees of Ruth’s Chris or Potbelly’s; I just don’t think Wall Street-backed companies with large-salaried CEOs should have been the first in line for the Paycheck Protection Program). I expect to see a lot of calls for accountability in the next couple weeks. Who got the money, how are they spending it, and why were they selected over other businesses are questions that must be answered. (Politico)
• COVID Loan Tracker is up to 9,000 surveyed businesses. They’ve added some great new stats so I encourage you to check out the site. Currently about 5% have received loans (although I am unclear what that really means; has money hit their accounts?). Like the news story above, these are overwhelmingly from smaller banks (84%). (COVID Loan Tracker)

Previous Entries:

Tuesday, April 14 | Monday, April 13 | Friday, April 10 | Thursday, April 9 | Wednesday, April 8 | Tuesday, April 7 | Monday, April 6

Masterplans is a veteran-owned business that specializes in providing the highest-level business development consulting located in Portland, Oregon. For 17 years we have helped thousands of entrepreneurs launch new businesses and put their ideas in motion. Now, more than ever, we want to see these same businesses survive the largest economic disaster of our generation.