NPR’s Planet Money podcast, hosted by Robert Smith and Nick Fountain, explains the economy to us in concise, personable episodes. Though they’ve been providing copious coronavirus coverage, they, like many other news outlets, skimmed over the small business relief in the $2 trillion stimulus package in favor of reporting on the individual stimulus checks and expanded unemployment benefits. So in this episode, they go back to that part of the bill to see what exactly is in it, how the program is working, and what might come up in the future, getting the real picture from auto repair shop owner Audra in Flushing, Queens as she tries applying for this money to keep her employees paid.
It’s understandable, perhaps, that the government would rush this unprecedentedly enormous stimulus package; coronavirus hit the economy hard and fast, and waiting to aid workers and business owners could have backfired tremendously. But this gargantuan legislation was put together in only a week, and “so far, its launch has been a mess,” Nick points out. The bill provides $350 billion in small business loans, designed to help companies keep their employees on the payroll. The intention was to keep unemployment from skyrocketing, as well as making sure businesses would be ready to roar back into action the moment they’re able to open back up, instead of wasting valuable time hiring and training new workers.
But there are several problems here: first, the loans are being given out on “basically the honor system,” and banks are leery to take on that amount of risk; they have fears of money laundering and fraud that need to be addressed. In addition, these loans are being given out on a first-come, first-serve basis, giving bigger businesses with high-priced lawyers and accountants the upper hand, while the independently-owned mom-and-pop shops are still trying to figure out the applications. Every bank is requiring different documentation, or only allowing customers with existing loans to even apply, and their computer systems are having trouble communicating with the U.S. government’s Small Business Administration’s system, which is supposed to approve the applications.
It all adds up to a confusing and frustrating process for small business owners, who worry that the money will just run out before they get a chance to grab their share. Listen to the episode to hear all about the execution of the Payment Protection Program, what the application process is actually like, and how one financial advisor views the package, on this episode of Planet Money.
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