Small Business Outlook Hits 7-Year Low After Trump Left Them In The Lurch
May 12, 2020
Small businesses have been devastated by the coronavirus pandemic, which was made even worse by the Trump administration’s botched implementation of the Paycheck Protection Program passed by Congress to help keep them afloat.
Small businesses’ outlook plummeted again last month to a seven-year low.
MarketWatch: “Small-business sales expectations fall to lowest level in NFIB survey’s history”
Dow Jones: “Optimism among small-business owners in the U.S. fell to a seven-year low in April as the coronavirus pandemic and its related widespread lockdown put activity into halt and dampened business expectations.”
The SBA inspector general found that Trump’s implementation of the PPP left out underserved communities and could saddle small businesses with debt.
SBA Inspector General Report: “Because the SBA did not provide guidance to lenders about prioritizing borrowers in underserved and rural markets, these borrowers, including rural, minority and women-owned businesses may not have received the loans as intended.”
Vox: “A new report from the inspector general for the Small Business Administration finds that forgivable loans from the government — intended to help small businesses weather the current economic fallout — could ultimately leave many weighed down by debt. The report, released Friday, concluded that rules created by SBA, which dictate how forgivable loans offered by the Paycheck Protection Program (PPP) can be spent, run counter to how Congress intended the program to be administered — and could be limiting the loans’ utility.”
Small businesses were left without a desperately needed lifeline because Trump botched the rollout of the PPP and provided unclear guidance.
CNBC: “While the $660 billion Paycheck Protection Program was instituted to give [small businesses] a lifeline through the coronavirus and economic shutdown, only 13% of the 45% who applied for the PPP were approved.”
Wall Street Journal: “On-the-fly rule changes are bedeviling small-business owners who got government-backed loans meant to keep them afloat during the coronavirus shutdown. Around three-quarters of the $670 billion loan program has been allotted, and some business owners approved for loans are wading through a thicket of rule changes to determine whether they still qualify.”
Bloomberg: “It’s the latest change to constantly shifting rules governing the PPP program, which have frustrated banks and business owners alike — in particular after a loophole allowed big restaurant chains and hotel groups, among other large companies, to rake in millions in low-interest loans while mom and pop shops couldn’t access the program.”
Trump allowed large corporations to take more than a billion dollars in funds meant for small businesses.
Washington Post: “Publicly traded companies have received more than $1 billion in funds meant for small businesses from the federal government’s economic stimulus package … Recipients include 43 companies with more than 500 workers, the maximum typically allowed by the program. Several other recipients were prosperous enough to pay executives $2 million or more.”
Reuters: “Forty-one publicly traded companies that got the emergency aid already had enough to cover basic expenses for two months or more when they applied for the funds, a Reuters analysis found — even if their revenue dropped to zero. … All told, these relatively flush 41 companies were able to secure $104 million in government aid, at a time when legions of smaller companies with little in their coffers were being turned down.”