The biggest banks in the U.S. were reportedly in talks with the Treasury on Monday (April 20) over the next round of Paycheck Protection Program (PPP) funding and how to best ensure it gets into the bank accounts of small businesses needing it most.
The higher-ranking bank executives are trying to figure out a way to “close loopholes” in the PPP that extended the forgivable, government-backed loans to big companies worth millions and with thousands of employees. National restaurant chains bumped smaller mom-and-pop cafes, and big law firms moved to the front of the line ahead of Main Street businesses, according to a FOX Business report on Tuesday (April 21) citing sources.
Congress is in the midst of negotiating another round of government-backed small business loans, and JPMorgan Chase confirmed to Fox on Monday that its source was correct and the bank was “in discussion with [the] Treasury” to figure out a way to close the PPP’s loopholes.
National Write Your Congressman, a small business advocacy group, said that 70 percent of small businesses tried for PPP loans during the first round. Banks, however, were only able to grant loans to 46 percent of the applicants. “Hundreds” of SMBs told Fox that they didn’t get money and didn’t understand why big restaurant chains like Ruth’s Chris Steakhouse and Potbelly Sandwich Shop got loans.
The PPP legislation was supposed to help SMBs struggling to survive amid the stay home mandates and business closures and downturns. The CARES Act allocated $350 billion for low-interest, forgivable loans to help small businesses with under 500 people stay afloat and keep paying employees.
The National Restaurant Association indicated that an estimated 417,000 restaurant employees lost their jobs in March. The figure is six times more than it was in October 2000, the last time record drops were posted in the industry, according to the blog ZeroHedge.
Senate Democrats and Republicans are approaching an agreement that would add more than $400 billion into the PPP.