APRIL 27, 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).
- The re-opening of the PPP was again met with technological struggles; the SBA’s application portal, E-Tran, crashed as soon as it opened today at 10:30 a.m. EST. Senator Marco Rubio, who heads the Senate’s Small Business Committee, said in a Twitter video that E-tran didn’t crash; rather lenders are experienced a “pacing” system designed for more lenders to be involved. He acknowledged some “glitches” with the pacing program but assured viewers that the SBA is doing everything they can to resolve them. (NPR, @marcorubio via Twitter)
- Over $2 billion of the Round 1 relief checks has been returned, and will be added to the Round 2 allotment. However, many public companies who received PPP loan are standing pat because they believe they followed all the requirements set forth in the legislation.(Fortune)
- These returned PPP loans include $4.6 million from the NBA’s Los Angeles Lakers NBA franchise. Obviously sports franchises, especially one as rich as the Lakers (they are valued at $4.4 billion), are not what we think of when we think of small businesses. The problem isn’t that they got one, it’s that they were eligible in the first place. They have less than 500 employees (records show around 300) and since the NBA has shut down their season, their revenue is most certainly affected, and since the legislation was written so broadly, they check those boxes. But whether or not they qualified, they had to know the funds would run out, and that they were in effect stealing that money from companies who desperately needed it. Since they are returning the funding, they will not be punished. (CNBC)
- If you’re a regular reader of our news roundup, you’ll know we’ve been concerned with the inequities of the PPP and EIDL programs. CBS reported that up to 90% of businesses owned by women and people of color have been shut out of the PPP, due in part to the fact that minority owned businesses are less likely to have commercial banking relationships (most banks are requiring a prior credit relationship to apply for the program). Another interesting point from the article cited data that showed women-owned businesses tend to be disproportionately effected by the COVID-19 pandemic because they often operate in industries where social distancing isn’t a possibility: restaurants, retail, salons, etc. So for many of these businesses, applying for the PPP doesn’t even make sense. (CBS)
- A few Democratic Senators have called on the SBA to investigate whether banks prioritized wealthy clients in applying for PPP loans. They cited a New York Times report that found JPMorgan Chase, Citibank, and U.S. Bank had separate “concierge” systems for larger existing commercial banking customers. (CNBC, New York Times)
- Senator Rubio said this morning via Twitter that the average loan size requested in Round 2 thus far is half the size of Round 1, which encouraged him to believe that self-employed and smaller businesses were gaining access to the program. (@marcorubio via Twitter)
- House Majority Leader Steny Hoyer announced it will re-convene next Monday, May 4 and that one of the first items of business will be a CARES Act 2. Let’s hope lessons have been learned from the first CARES Act. I also hope that the next effort will look at stimulus instead of merely relief. (@BresPolitico via Twitter)
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Friday, April 24 | Thursday, April 23 | Wednesday, April 22 | Tuesday, April 21 | Monday, April 20 | Friday, April 17 | Thursday, April 16 | Wednesday, April 15 | 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.