Some small-business owners got $0, while lenders got billions in fees -

Some small-business owners got $0, while lenders got billions in fees -

Some small-business owners got $0, while lenders got billions in fees -

Posted: 17 Apr 2020 02:19 PM PDT

Small-business owners across America are outraged after the coronavirus relief program intended to extend them a financial lifeline exhausted its $350 billion fund less than two weeks after it started — while lenders took home almost $6 billion in fees.

"We survived the 9/11 economic hardships and the 2008 economic downturn that seemed to go on forever, but I don't know if we will survive the COVID-19 economic disaster," said Candace Senato, who has owned a Tempe, Arizona-based freight shipping company for 28 years.

"I believe that, tragically, the number of small businesses who have to shut their doors will far exceed the anticipated number," Senato said. "I would like to know who received the funds, and from which banks. So far, none of the small businesses we know like ours received funding from our bank."

The Small Business Administration opened two programs: The $350 billion Paycheck Protection Program offered businesses with fewer than 500 employees a loan that can turn into a free grant if used to cover payroll and other allowed expenses and employees aren't laid off. The Economic Injury Disaster Loan provided up to $2 million in financial assistance for any business that has losses as a result of the pandemic.

However, now that the money has already dried up for both programs, business owners' frustrations have only grown.

"This is crazy," said Doug Yurubi, co-owner of the Benn Conger Inn in New York's Finger Lakes region. He applied for the SBA programs as soon as they were available, but after having trouble applying online he was forced to print his documents and mail them in. There were issues with that, so he was asked to go online and apply again. But by that point the funding was all gone.

"It is frustrating due to the small window of opportunity to maintain business," wrote Yurubi. "This is not right."

While some customers, especially those with community banks, have reported success getting through the program, many small-business owners find themselves waiting for a lifeline they're not sure will appear.

On Friday, the SBA disclosed the first final accounting of the exhaustion of the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act funding for the initial phase of the PPP program. In sum, 1,661,367 loans were approved for $342,277,999,103 from 4,975 lenders through noon Friday, the SBA said in a release.

The total amount approved was lower than the $349 billion allocated because approximately $6 billion went to lender fees, as prescribed by the legislation.

The top five industries receiving the loans, in descending order, were construction, services, manufacturing, health, and accommodation and food services. These loans compromised nearly 60 percent of the total amount.

By state, California received the most PPP loans, at $33 billion, followed by Texas ($28 billion); New York ($20 billion); Florida (almost $18 billion); and Illinois (nearly $16 billion). Three-quarters of the loans were for $150,000 and under. Four percent of the loans were for over $1 million, consisting of nearly 45 percent of the total money disbursed.

However, despite the amounts of funding that have been committed, the nation's biggest retail banks were largely unable or unwilling to share figures on how many funds had actually been actually deposited into customers' bank accounts.

Chase this week disclosed it had executed around $14 billion into accounts. Citigroup said it received applications for $3 billion. Bank of America said it had received over 330,000 applications and CEO Brian Moynihan said "thousands" had been approved by the SBA. Wells Fargo said it received over 370,000 "expressions of interest" and "some" of those customers have moved onto a formal application, the Minneapolis/St. Paul Business Journal reported.

"We will continue to prepare applications in our existing pipeline from small and mid-size businesses and will submit them to the SBA when funds become available," Wells Fargo spokeswoman Vickee Adams told NBC News. "We stand ready to help the hundreds of thousands of customers waiting for this much-needed assistance."

Despite the challenges and uncertainties, experts say that small-business owners shouldn't give up.

While Republicans and Democrats both want to replenish the funds, they're unlikely to resolve their differences over how to do so, and whether to create set-asides for vulnerable groups and add funding for hospitals and state governments, before Congress resumes in May.

In the meantime small-business owners can still apply at the many banks that are still accepting and processing applications in the expectation of added funding. If they've already applied they should keep working with their banker to make sure all their paperwork is ready, said James Brower, a partner at Marks Paneth, an accounting and advisory firm.

"Gather data and submit an application to at least get in line," said Brower.

POLITICO Playbook PM: Signs of progress on money for small business loans - Politico

Posted: 17 Apr 2020 10:30 AM PDT

THERE HAS BEEN SOME MOVEMENT ON A DEAL to refill the PAYCHECK PROTECTION PROGRAM, the main federal vehicle for loans to small businesses walloped by the coronavirus crisis. Capitol Hill sources stress that it is the TRUMP ADMINISTRATION doing the heavy lifting talking to Democrats at the moment, and it will be incumbent upon the WHITE HOUSE and the administration to sell this deal to every lawmaker in both chambers, since this will probably require unanimous consent.

HERE ARE SOME INITIAL ITEMS IN THE MIX … NOTHING IS FINAL! This is an update about a few points that are under discussion:

THE PPP will be refilled. Republicans are now aiming for more than $251 billion. DEMOCRATS ARE MOVING TOWARD GETTING MONEY for community banks … THE DEAL IS ALMOST CERTAIN TO INCLUDE a refresh of the EIDL, another disaster loan program.

THE DEAL LOOKS LIKE IT WILL HAVE $75 BILLION for hospitals. … REPUBLICANS are holding firm against any money for state and local governments in this package. But this could be revisited.

-- MELANIE ZANONA: "McCarthy signals progress being made on small business relief": "[House Minority Leader Kevin] McCarthy signaled Friday that the GOP has softened its position, with the California Republican saying he would be open to a deal that includes funding for hospitals, but not money for state and local governments, though Republicans have said those can be addressed at a later date. …

"But efforts to fast-track a vote will take cooperation from all members -- and Rep. Thomas Massie (R-Ky.) has already signaled he wants a recorded vote, which would require a quorum -- at least 216 members --to be present in the Capitol." POLITICO

PPP AT WORK? … WSJ: "Ruth's Chris Steak House Gets $20 Million From Coronavirus Aid Program," by Charity Scott

Happy Friday afternoon.

REMINDER: We're talking to celebrity chef DAVID CHANG, founder of Momofuku, and MARGUERITE MARISCAL, CEO of Momofuku, at 9 a.m. Monday about the impact the coronavirus has had on the restaurant industry and what Washington needs to do. Register

WHAT'S ON THE PRESIDENT'S MIND -- @realDonaldTrump at 11:21 a.m.: "LIBERATE MINNESOTA!" … at 11:22 a.m.: "LIBERATE MICHIGAN!" … at 11:25 a.m.: "LIBERATE VIRGINIA, and save your great 2nd Amendment. It is under siege!"

-- THIS IS PRESIDENT DONALD TRUMP now openly backing anti-lockdown protesters in several Democratic-led states, just after a Fox News segment on them.

NEWS YOU SHOULD USE -- "Which Mask Should You Wear?" by NYT's Tara Parker-Pope, Rachel Abrams, Eden Weingart and Tony Cenicola

CLOSED DOORS, REOPENED COUNTRY? … JOSH GERSTEIN: "How Trump can skirt transparency rules as he talks to business leaders": "By contending that the 200-plus business leaders [the White House] is talking to are not developing any consensus recommendations — just offering their opinions — the effort might not have to comply with a core transparency statute, the Federal Advisory Committee Act. The law requires formal outside advisory committees to hold open meetings and issue public reports. Notably, the White House also avoided the term 'committee' in its announcement.

"Ultimately, the loose effort, cobbled haphazardly with little notice to the participants, may amount to little more than a glorified CEO suggestion box. … Still, transparency advocates argue that the business initiative sounds like the kind of panel Congress was trying to regulate when it passed FACA in 1972 to standardize and open up the way the federal government seeks official advice from industry and outside experts." POLITICO

IMMIGRATION FILES -- "White House Seeks to Cut Wages, Smooth Migrant Labor Hiring for Farms Squeezed by Coronavirus," by WSJ's Michelle Hackman and Jesse Newman: "The push is driven by newly installed White House chief of staff Mark Meadows and Agriculture Secretary Sonny Perdue, these people said, and many agricultural employers support lower wages. Mr. Perdue has long championed easing requirements on seasonal agricultural guest-worker visas, known as H-2A, and the administration's pandemic response has accelerated some of these changes.

"The wage change, which the administration hasn't yet formally proposed, would effectively cut the minimum wage for migrant farmworkers to $8.34 an hour, 15% above the federal minimum wage. That would amount to a cut of around $2 to $5 per hour from current wage rates, which vary by state. States with higher minimum wages wouldn't be subject to the new rate." WSJ

WORSE NUMBERS IN CHINA -- "China's virus death toll revised up sharply after review," by AP's Ken Moritsugu in Beijing: "The new figures resulted from an in-depth review of deaths during a response that was chaotic in the early days. They raised the official toll in Wuhan by 50% to 3,869 deaths. … The higher numbers are not a surprise — it is virtually impossible to get an accurate count when health systems are overwhelmed at the height of a crisis — and they confirm suspicions that many more people died than the official figures had showed." AP

-- WSJ: "Coronavirus Ravages China's Economy—and It's Just Getting Started," by Jonathan Cheng in Beijing: "China on Friday reported a 6.8% year-over-year contraction in its economy for the first three months of the year—the first quarterly decline in gross domestic product since official record-keeping began in 1992 and likely the first since Mao Zedong's death in 1976, economists said. The fall was even steeper compared with the previous quarter: a 9.8% pullback."

CATASTROPHIC -- "Africa could see 300,000 coronavirus deaths this year," by AP's Cara Anna in Johannesburg: "Under the worst-case scenario with no interventions against the virus, Africa could see 3.3 million deaths and 1.2 billion infections, the report by the U.N. Economic Commission for Africa said. Even with 'intense social distancing,' under the best-case scenario the continent could see more than 122 million infections, the report said.

"Any of the scenarios would overwhelm Africa's largely fragile and underfunded health systems, experts have warned. Under the best-case scenario, $44 billion would be needed for testing, personal protective equipment and treatment, the report said, citing UNECA estimates. The worst-case scenario would cost $446 billion." AP

-- SIMON MARKS, POLITICO's man in Addis Ababa: "Coronavirus ends China's honeymoon in Africa"

THE LATEST FAR-RIGHT SHENANIGANS … "Bill Gates, at Odds With Trump on Virus, Becomes a Right-Wing Target," by NYT's Daisuke Wakabayashi, Davey Alba and Marc Tracy: "In a 2015 speech, Bill Gates warned that the greatest risk to humanity was not nuclear war but an infectious virus … That speech has resurfaced in recent weeks with 25 million new views on YouTube — but not in the way that Mr. Gates probably intended. Anti-vaccinators, members of the conspiracy group QAnon and right-wing pundits have instead seized on the video as evidence that one of the world's richest men planned to use a pandemic to wrest control of the global health system. …

"In posts on YouTube, Facebook and Twitter, he is being falsely portrayed as the creator of Covid-19, as a profiteer from a virus vaccine, and as part of a dastardly plot to use the illness to cull or surveil the global population. The wild claims have gained traction with conservative pundits like Laura Ingraham and anti-vaccinators such as Robert F. Kennedy Jr. … Misinformation about Mr. Gates is now the most widespread of all coronavirus falsehoods tracked by Zignal Labs … Mr. Gates, who is worth more than $100 billion, has effectively assumed the role occupied by George Soros." NYT

-- MEANWHILE … "'It's overwhelming': On the frontline to combat coronavirus 'fake news,'" by Mark Scott: "In the battle to stop rumors, half-truths and lies about the coronavirus pandemic spreading online, social media giants are relying heavily on a global network of independent fact-checkers. The results have not been great.

"From the Balkans to Brazil, these journalists and researchers — mostly working in isolation at home — have been given access to the companies' inner workings, including data about how possible fake posts are performing on the platforms. Scrolling through piles of misinformation, the fact-checkers' goal is to debunk as many falsehoods as they can to keep people safe from content that, in the most severe cases, puts lives in jeopardy. … Many feel they don't have the tools to do their job, while others worry about colleagues breaking under the strain." POLITICO

PLAYBOOK METRO SECTION -- D.C. schools won't reopen in person for the rest of the school year, Mayor Muriel Bowser announced.

NYC DISPATCH -- "Scores of NYC workers have died on the front lines of the coronavirus fight," by Sally Goldenberg and Danielle Muoio: "At least 138 municipal workers have succumbed to the highly-contagious virus, according to a POLITICO survey this week of the city's uniformed agencies and some of its largest unions. The tally, which rose by the hour, provides a glimpse into the toll the illness has taken on some of the lowest-paid employees whose jobs demand their presence at a time when most New Yorkers have retreated to their homes.

"They are safety agents who protected students before schools closed on March 16, maintenance crews who tidy up public housing apartments and social service workers who provide food stamps to the neediest residents." POLITICO New York

CASH DASH … SCOTT BLAND: "Trump-backed online donor platform launches at state level ahead of redistricting": "WinRed, which launched last year, is partnering with the Republican State Leadership Committee to make the platform available to state-level GOP candidates, another step in the group's drive to get the entire Republican Party using one system for digital fundraising. The platform offers features including one-click donating, the ability to set recurring donations and optimized fundraising pages." POLITICO

200 DAYS TO NOV. 3 -- "Coronavirus could complicate Trump's path to reelection," by AP's Jonathan Lemire, Nicholas Riccardi and Thomas Beaumont: "Trump's campaign is concerned about losing support in several key swing states, particularly Florida and Wisconsin, according to five current and former campaign staffers who spoke to The Associated Press … There are also growing worries about Arizona and Pennsylvania. There is no better example of the altered map confronting Trump than Michigan."

MEASURING THE DRAPES -- "Biden says he's already choosing a presidential transition team," by WaPo's Sean Sullivan: "Discussions are underway about the prospect of elevating some White House offices to Cabinet-level positions, Biden said. Among those that will be under consideration for the Cabinet: The Office of Science and Technology Policy; the global health security pandemic office; and a separate climate change operation that 'goes beyond the EPA,' he said. …

"Pre-election cabinet announcements would be highly [unusual]. But the possibility reflects a campaign trying to project competence and preparedness, qualities it hopes will contrast with Trump." WaPo

TV TONIGHT -- Bob Costa talks with WBUR's Kimberly Atkins, NYT's Peter Baker, CBS' Paula Reid and NBC's Kristen Welker at 8 p.m. on PBS' "Washington Week."

TRANSITION -- Mike Kelleher is now director of external affairs at the 2Blades Foundation, an agriculture research organization focused on food security. He most recently spent a decade as an adviser and speechwriter at the World Bank under Jim Yong Kim, and is an Obama White House alum.

McCarthy signals progress being made on small business relief - POLITICO

Posted: 17 Apr 2020 10:37 AM PDT

"A deal would look like the PPP … You could possibly get some hospital. I think that would be the deal. I don't think you'd get any state money. … that's where I think it would end," said McCarthy, who flew back to D.C. this week and had a meeting in the Oval Office with President Donald Trump and Treasury Secretary Steven Mnuchin Thursday night. "I'm fine with doing some hospital [money]."

McCarthy also said he could support additional funds for the Economic Injury Disaster Loan program, another program for small businesses that Democrats are pushing to increase.

The shift tone — which comes as both sides are facing mounting pressure to reach an agreement — could pave the way for a potential deal following over a week of partisan gridlock.

The shift in tone comes after both sides are facing mounting pressure to reach an agreement. Republicans spent all week hammering Speaker Nancy Pelosi and Democrats for holding up critical aid to small businesses. "I think it's backfiring on Pelosi," McCarthy said.

McCarthy said he's heard from Democratic lawmakers who are growing restless and just want to pass the small business aid. But only one Democrat — Sen. Kyrsten Sinema of Arizona — has publicly broken with Democratic leadership.

As far as timing, the Senate is scheduled to hold a pro forma session on Monday at 2 p.m., while the House is scheduled to hold one the following day. McCarthy acknowledged there could be a vote as soon as next week if they reach a deal.

But efforts to fast-track a vote will take cooperation from all members — and Rep. Thomas Massie (R-Ky.) has already signaled he wants a recorded vote, which would require a quorum — at least 216 members — to be present in the Capitol.

Members in both parties have been promised that they will receive ample notice if they need to return to Washington.

JPMorgan says it has $26 billion in small business relief applications that need funding - CNBC

Posted: 17 Apr 2020 02:51 PM PDT

Pedestrians pass a JPMorgan Chase & Co. bank branch near the New York Stock Exchange in 2018.

Bloomberg | Bloomberg | Getty Images

JPMorgan Chase says it has closed more small business relief loans than any other bank, but it still has a huge mountain of applications from business owners who are now in limbo. 

The bank has disbursed $14 billion in loans for the government's $350 billion coronavirus relief effort, according to the company. But it has about $26 billion worth of applications from hundreds of thousands of business owners that could go forward if Congress secures more funding for the Paycheck Protection Program, it said.

"Chase has secured more funding for small businesses than anyone else in the industry," spokeswoman Trish Wexler said in a statement. "We're fully prepared to help many, many more once additional funding is approved. We're proud to support businesses that collectively employ more than a million hard working Americans."

The PPP, a key component of the $2 trillion stimulus bill signed into law last month, has quickly been drained of its $350 billion allotment despite a rocky start. Major lenders like JPMorgan, Wells Fargo and Citigroup have told applicants that the first-come, first-served effort is currently out of funding. Now Congress needs to come to an agreement to approve more money for the popular program.  

After technical snafus with the Small Business Administration portal for the program and other issues, banks have begun to disburse funds more quickly this week, until they ran out of money on Thursday.

About half the loans that JPMorgan made were for less than $140,000, and more than 60% went to companies with fewer than 25 workers, the bank said.


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