John Scully Shares Expertise on the Paycheck Protection Plan in ValueWalk
When congress passed the CARES Act, one of the goals was to provide relief for small businesses impacted by the coronavirus pandemic. The Paycheck Protection Plan is aimed to help small businesses keep their staff employed while their business is shut down. However, the program has had some issues getting aid to businesses in a timely manner. John Scully shares his opinion with ValueWalk on how small businesses have yet to find essential relief:
“The good news: Many small businesses quickly became aware of the Paycheck Protection Plan’s benefits and were eager to submit loan applications. However to-date, few companies have actually received any funding. So concern is now mounting that many small businesses will either be locked out of the program or funding will arrive too late to save employee positions that the program was originally intended to protect. Early on, many small businesses encountered frustrations in three key areas:
- Delays with certain banks in getting their websites operational and ready to receive applications.
- Difficulty in obtaining clear guidance about information needed for applications (e.g., can employer paid FICA be included in the loan amount, understanding the impact of traditional affiliation rules, etc.).
- Lack of concrete feedback from banks regarding the status of submitted applications.
Based on these frustrations, I personally suspect that many small businesses will be re-evaluating their banking relationships after the immediate crisis passes. Today, the concern is that the SBA funding may run out of funding before many qualified applications are approved, especially given Congress has adjourned without increasing the $350 billion allocated to help small businesses during this emergency. Looking to the future, assuming these small business frustrations are not reasonably addressed, it will be interesting to see the public reaction, especially given the government’s asymmetrical approach to supporting banks, airlines, etc. compared to small businesses.”