It most likely takes about as much time for bank to process a bailout for a larger company than a smaller company. At least 75% of the SBA money should be going to individuals through payroll anyways, so why wouldn't you want to serve larger companies first?
Larger companies weren't supposed to be the target of the "small business" loans/grants.
$500 billion was set up for corporate bailouts.
$350 billion for small business.
Large companies took both.
America is mostly small business, money should have gone directly to them via SBA/IRS and then they get to pick the bank to service it like the FAFSA student loan system. There should never have been banks needing to process these, all the information is already known. It was a filter to make sure big business got it.
Many larger companies just wanted the 1% loan that has to be paid back in 2 years. They have access to other funding and have more assets for leverage in those dealings. Small businesses, true small business now, do not have that access to capital.
The PPP for instance 75% needed to go to payroll, so larger companies free up other money, and use the PPP for payroll while continuing to roll. 25% can be used for non payroll but other needed expenses. It was a sham.
The rules also hit small business harder on payback, the amount that turns into a grant is based on retained employees, so with a smaller headcount, less people leaving causes a bigger hit for small business. It should have had a revenue component to that.
Fact: companies on the public markets are not "small business", zero would be classified that way in any other metric.
If you truly think most of the money is going to go to individuals in the end I have a 'bailout' to sell you.
> Larger companies weren't supposed to be the target of the "small business" loans/grants.
That was what explicitly written in the bill, so you'd have to blame Congress, if anyone. It's not like TopGolf is big enough to buy out politicians.
> money should have gone directly to them via SBA/IRS
The SBA had 3293 employees in 2015. They don't have the capacity to process all the applications either.
> The PPP for instance 75% needed to go to payroll, so larger companies free up other money
These companies are shut down at the moment. They don't have other money. If they did, I'm interested to see proof that they're just messing with accounting.
> That was what explicitly written in the bill, so you'd have to blame Congress, if anyone. It's not like TopGolf is big enough to buy out politicians.
America for some reason now trusts politicians and bankers, it isn't working out.
We need to go back to not showing our cards on politics, who you vote for used to be secret and in invasion of privacy to know. Why do people put themselves in tribes and lose out on leverage? I can't tell you, it makes no sense.
I'd like us to go back to not saying who you vote for, being tough on bankers and politicians, and carry a big FDR/Teddy Roosevelt anti-trust sword to chop them down.
The market/economy is a garden, the struggling plants need help and the overgrowth needs to be harvested and trimmed back.
> The SBA had 3293 employees in 2015. They don't have the capacity to process all the applications either.
You glossed over the IRS which has the data on what people/companies pay. They know more than the banks.
IRS is used in FAFSA and it works great for getting student loans approved, then you select the servicer. Same should have happened here for the banks/small business. Once approved you go select your bank (servicer) that gets fess on free guaranteed money for the bank.
There are 30 million small businesses, 22 sole proprietors, and most are < 10 employees. There was nothing for these people, zero leverage, zero help. They make up 99% of America. America truly is a small business long tail.
> These companies are shut down at the moment. They don't have other money. If they did, I'm interested to see proof that they're just messing with accounting.
The point is they used this for a cheaper loan. They had access to other capital and assets for leverage, small businesses do not.
The companies that are on the public markets, many of them are, have direct access to more capital.
