A CRITIQUE OF THE BAILOUT
I've spent most of the day attempting to digest the two types of loans that will be available to small business and individuals. Unless you have your records in bankable order, you are SOL.
SEE... https://home.treasury.gov/system/files/…/PPP--Fact-Sheet.pdf SEE... https://covid19relief.sba.gov/#/
The PPP, "The Payroll Protection Program" provides for only a few months of loans with 75% going to payroll and 25% going to utilities, rents and mortgages.
The loan period begins on February 15th and lasts for two and one half months and loans must be applied for by June 30th..
The loans must be applied for through a bank for PPP loans and the SBA for economic injury loans.
The bank makes the decision if a percentage of the loan can be forgiven or if it must be repaid over two years and these loans can be sold and aggregated by the banks.
Accountants and CPA's will be paid from the proceeds of the loan. It will be virtually impossible for most small businesses to navigate the loan application process without professional representation.
Can you imagine a self employed person with no resources going into Chase Bank and applying for a loan?
A person in this situation with no bank relationship and poor books just can't get it done.
It would have been so much easier for the Treasury Department to sell securities to the Fed to cover the cost of a universal bailout and simply send $2,000 per month to every adult American who has a social security number and then fill in the gaps from there.
Realistically, I don't see how this loan bailout system will work. Who will handle all these loans at the banks? They are ill equipped for the task because they will be forced to deal with masses of individuals and small businesses that are not necessarily bankable.
It looks like a wreck in slow motion to me. Please read the details of both loan programs and let me know how they appear to you.
Finance Director/Sales Mgr/Analyst/Auditor
4 年Spot on. If it was easy they would have not okd it.