Reconsidering your PPP loan? There's a new deadline for returning it
- Author: Ismael Montgomery May 09, 2020,
May 09, 2020, 0:25
The Treasury Department and SBA issued guidance on April 23 warning companies with large valuations and access to capital markets that it's unlikely they could certify in good faith on their applications that the loan is "necessary to support the ongoing operations of the applicant". The PPP was set up to help small businesses pay their employees, but larger companies like Shake Shack and the Los Angeles Lakers drew criticism when they were also revealed as recipients (both have returned the money).
By industry segment, the analysis found that businesses in the retail trade and accommodation and food services -which were hard-hit by social distancing measures imposed to contain the pandemic - received more PPP funding than industries that likely lost less revenue, such as information, finance and insurance, and educational services.
SBA Syracuse District Director Bernard Paprocki said in a statement that the funds, loaned through banks or lenders, can help "keep your venture intact" for the next eight weeks and, hopefully, position businesses not just for survival but success.
Wells Fargo disclosed this week that federal and state authorities are investigating its lending practices under a government-backed small business loan program created to blunt the economic pain of the coronavirus pandemic.
Emergency loans issued by the Small Business Administration have been more concentrated in areas with pre-existing bank relationships than those most affected by the coronavirus pandemic, economists at the Federal Reserve Bank of NY said in a Wednesday blog post. The coalition asserts that both the first and second rounds of funding with this program have left numerous hardest hit small businesses across the country underserved.
Russian Federation reports 9,623 new COVID-19 cases in a day
Fifty eight people died over the past 24 hours, bringing the total death toll to 1,280. Moscow recorded 5,358 new cases, bringing the capital's total tally to 62,658.
Small lenders tended to grant smaller loans, according to the data. More than 2.3 million loans worth $181 billion have been awarded in the second round of the program.
It is unclear how numerous loan applications have been processed under the Economic Injury Disaster Loan program, however.
There are also other options besides PPP with relief programs such as the Federal Reserve's Main Street Lending Program, said Paul Merski of the Independent Community Bankers of America.
Instead, those who have received PPP loans are beginning to focus on ensuring that all their expenditures will be forgiven under the program.