Quote:
Originally Posted by FlyingScot
My company borrowed $367K as part of the same Paycheck Protection Program, so I'll fill in a few blanks:
The program is really well intentioned--it allows a company to borrow 2.5 months' worth of payroll, and then forgives the entire amount if the company does not fire employees between now and June. So essentially the government is covering your payroll expenses under the condition that you do not fire anyone.
But the problem is that there is no real requirement that a company "need" the money. So even if your business was doing fine, you could still get the loan. The real determinant of who got the first round of loans was companies who were able to complete the (very easy) paperwork instantly and also had good relationships with their banks. We were lucky to have a very good relationship with a small local bank, so we avoided the horror stories.
Who has good relationships with big banks who doled out the lion's share of the loans. If you guessed large, sophisticated companies with plenty of financial resources, you'd be correct.
Who cannot get the free money? The people who need it most. Restaurants who laid everybody off, but still have to pay rent and are going to have a miserable time even after they are allowed to reopen, just for example.
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Flying Scott, you and I agree! We “borrowed“ $1,360,000. Obviously we are not the target audience to this program. However, we employ about 55 people and it is going to them. As someone who has only contributed my whole adult working like, I don’t feel too guilty other than burdening my kids with the debt! However, when I go, I think they’ll be okay! ;-)
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