As businesses both large and small are forced to remain closed due to state-ordered shutdowns, the US Congress (the least efficient body in the United States) has been tasked with creating bipartisan legislation to lead our nation out of its darkest hours. And, like always, Congress is falling short.
After Congress passed its $2 trillion “main street” relief package back in March, the government effort has been lacking, to say the least. Since then, small businesses have been squashed, as the $350 billion in small business loans approved were not nearly enough to go around. Surveys show that around only 5% of small businesses in the nation received these Packcheck Protection Program (PPP) loans. Even worse, some of these loans aren’t actually falling into main streets pockets. On the other hand, large institutions, like Harvard, initially received 9 million dollars, as did corporations like Shake Shack before returning the loans after coming under scrutiny.
On top of the gross misappropriation of funds, banks seized the opportunity to enrich themselves. Bank of America required customers who received PPP loans to open up credit cards for their businesses with the bank, sparking backlash from senators. Additionally, the four largest banks in the United States have recently been sued due to their actions surrounding the distribution of these loans. The lawsuit alleges banks failed to process forgivable loans in the $349 billion program on a first-come first-served basis. Each bank “concealed from the public that it was reshuffling the PPP applications it received and prioritizing the applications that would make the bank the most money,” according to the four lawsuits (CNN). As a result of this “dishonest and deplorable behavior,” the lawsuit said thousands of small businesses “were left with nothing” when funding for the PPP ran out.
This past week, Congress passed legislation adding an additional $250 billion to the PPP program so that businesses still in need of cash can obtain it. But this additional funding is too little too late. According to Harvard Business School, small businesses with less than 10 thousand in expenses only have enough cash to get through 1 month of their typical expenses before they’re forced to fold. In fact, it’s so dire that it’s estimated that only 15% of the nation’s restaurants and bars will make it through 6 months of this shut down.
Small businesses in the United States employ over 50 million people, and right now they feel betrayed by their own government. It’s time for Congress to step up and take bold steps to protect the backbone of our country.