{"id":137186,"date":"2020-12-19T01:04:00","date_gmt":"2020-12-18T22:04:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/opinion-paycheck-protection-program-has-gone-from-business-lifesaver-to-a-mess\/"},"modified":"2020-12-19T01:04:00","modified_gmt":"2020-12-18T22:04:00","slug":"opinion-paycheck-protection-program-has-gone-from-business-lifesaver-to-a-mess","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/opinion-paycheck-protection-program-has-gone-from-business-lifesaver-to-a-mess\/","title":{"rendered":"#\n  Opinion: Paycheck protection program has gone from business lifesaver to a mess"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3688bd17491\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3688bd17491\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-paycheck-protection-program-has-gone-from-business-lifesaver-to-a-mess\/#Businesses_still_dont_know_if_their_PPP_loan_really_will_be_forgiven_and_that_is_putting_the_broader_economy_at_risk\" >Businesses still don\u2019t know if their PPP loan really will be forgiven, and that is putting the broader economy at risk<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/opinion-paycheck-protection-program-has-gone-from-business-lifesaver-to-a-mess\/#Nicholas_Anthony\" >Nicholas Anthony<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Opinion: Paycheck protection program has gone from business lifesaver to a mess<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Businesses_still_dont_know_if_their_PPP_loan_really_will_be_forgiven_and_that_is_putting_the_broader_economy_at_risk\"><\/span>\n  Businesses still don\u2019t know if their PPP loan really will be forgiven, and that is putting the broader economy at risk<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000102899\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       The Paycheck Protection Program (PPP) was designed to be a lifeline for the businesses caught in the waves of the COVID-19 pandemic. But rather than a buoy of hope, the other end of the line <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears to have been tied to an anchor of uncertainty \u2014 threatening not just to drown the very businesses it was designed to help most but to also weigh down the economy as a whole.<\/p>\n<p> At the moment,\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.vox.com\/21529071\/ppp-loan-forgiveness-lenders-sba-delay-paycheck-protection-program\" class=\"icon none\">business owners are unsure<\/a>\u00a0of how to take the next step to secure forgiveness for their PPP loans, the condition that effectively transforms the loans into grants. This promise was the keystone of the design. <\/p>\n<div class=\"paywall\">\n       The<br \/>\nrules said that if the money was spent on payroll and met\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sba.gov\/funding-programs\/loans\/coronavirus-relief-options\/paycheck-protection-program\" class=\"icon none\">certain conditions<\/a>, the loan would be<br \/>\nforgiven. Yet, it hasn\u2019t been simple in practice. The PPP was launched when<br \/>\nCongress passed the\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.congress.gov\/116\/bills\/hr748\/BILLS-116hr748enr.pdf\" class=\"icon none\">CARES Act<\/a>\u00a0in March, but<br \/>\nbusinesses are still waiting to find out if the $525 billion in loans will be<br \/>\nforgiven.<\/p>\n<p>Originally businesses had to use funds within eight weeks (later extended to 24 weeks) if they wanted to seek forgiveness, yet there has been no <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> regarding a deadline for the Small Business Administration (SBA) to confirm forgiveness. In fact, the SBA seems poised to have business owners on the edge of their seats. By Oct. 1,\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/business\/2020\/10\/01\/ppp-sba-loans\" class=\"icon none\">not a single loan had been forgiven<\/a>. The SBA did not even\u00a0<em>begin\u00a0<\/em>the process until banks and borrowers\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/u-s-to-start-forgiving-ppp-loans-after-borrowers-complained-11601414687\" class=\"icon none\">issued numerous complaints<\/a>\u00a0after more than 96,000 applications had been submitted. \u00a0<\/p>\n<p>It\u2019s not just a<br \/>\nmatter of getting one\u2019s to-do list checked off. Until businesses receive<br \/>\nforgiveness confirmation, they are stuck with loans on the books that are<br \/>\npreventing additional loans from being received. Worse yet, some of these<br \/>\nbusinesses are going to learn their\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2020\/08\/14\/these-business-owners-wont-get-full-forgiveness-on-their-ppp-loans.html\" class=\"icon none\">loans will not be forgiven in full<\/a>, or maybe even at<br \/>\nall.<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.americanbanker.com\/news\/banks-ppp-recipients-caught-in-bind-between-two-sba-rescue-programs\" class=\"icon none\">Noah Wilcox<\/a>, chairman of the Independent Community Bankers of America<br \/>\nand CEO of Grand Rapids State Bank, learned just that when he found his bank\u2019s<br \/>\nclients had nearly $150,000 in unforgivable loans. Unfortunately for many<br \/>\nbusiness owners, this is because aid granted by the Economic Injury Disaster<br \/>\nLoan (EIDL) program is deducted from what can be forgiven under the PPP.\u00a0<\/p>\n<p>Looking back, this might seem like a case of oversight, but the issue is rooted much deeper. The mood in Congress during the drafting of the CARES Act was to get funding out as quickly as possible and consider the details at a later time. In doing so, they overlooked the importance of providing a foundation of concrete expectations during a time of crisis.<\/p>\n<p>Congress decided it<br \/>\nwould patch holes as the leaks appeared. While this is better than letting the<br \/>\nship sink,\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.americanbanker.com\/news\/banks-ppp-recipients-caught-in-bind-between-two-sba-rescue-programs\" class=\"icon none\">the<\/a>\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.mcguirewoods.com\/client-resources\/Alerts\/2020\/10\/new-sba-changes-in-ownership-procedures-ppp\" class=\"icon none\">flurry<\/a>\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.forbes.com\/sites\/alangassman\/2020\/08\/04\/sba-makes-further-changes-to-ppp-rules-in-august-4th-pronouncement\/?sh=152447b71d8d\" class=\"icon none\">of<\/a>\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/home.treasury.gov\/news\/press-releases\/sm1148\" class=\"icon none\">changes<\/a>\u00a0since the CARES Act\u2019s passage<br \/>\nhas left business owners in a state of confusion as they try to understand what<br \/>\nto do next. The\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.mainstreetalliance.org\/ppp_forgiveness_confusion\" class=\"icon none\">Main Street Alliance<\/a>\u00a0illustrated<br \/>\nthis in a recent survey where they found that the ongoing changes to the PPP<br \/>\nhave left 64% of business owners confused about what was and what was not<br \/>\neligible for forgiveness.<\/p>\n<p>And while these<br \/>\nowners may be the ones on the hook for the loans, the uncertainty surrounding<br \/>\nthe PPP risks weighing down the economy as a whole. Although many banks understand<br \/>\nthat this not a normal loan, it still has to be treated as one. This means that<br \/>\nsome businesses are unable to secure funding through additional private loans<br \/>\nuntil the PPP loans are off their books. And other businesses have\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.vox.com\/21529071\/ppp-loan-forgiveness-lenders-sba-delay-paycheck-protection-program\" class=\"icon none\">put off spending<\/a>\u00a0until they<br \/>\nknow forgiveness is certain.<\/p>\n<p>In short, despite the Federal Reserve combating the pandemic with interest-rate targets just barely above 0%, businesses are unable to get the funding they need to grow. Considering spending has already\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/fred.stlouisfed.org\/series\/M2V\" class=\"icon none\">collapsed<\/a>\u00a0in response to this crisis, the last thing the economy needs is for the government to disincentivize businesses from investing in internal growth and innovation.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>If businesses are<br \/>\nto both survive and grow during this pandemic, the SBA needs to take im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te<br \/>\nsteps to clear the fog and clarify the PPP forgiveness process. The SBA<br \/>\ncertainly deserves credit for\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/home.treasury.gov\/news\/press-releases\/sm1148\" class=\"icon none\">simplifying the process<\/a>\u00a0for loans<br \/>\nbelow $50,000. However, more needs to be done to provide clear and concrete<br \/>\ninformation to business owners so that they can form realistic expectations<br \/>\nand, ultimately, more forward.<\/p>\n<p>At first glance,<br \/>\nthe <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.congress.gov\/bill\/116th-congress\/senate-bill\/4117\" class=\"icon none\">Paycheck Protection Small Business<br \/>\nForgiveness Act<\/a>\u00a0(proposed in June 2020) appears to be the solution.<br \/>\nThe act would allow businesses with loans below $150,000 to submit a legally<br \/>\nbinding letter declaring that they have not committed fraud so that they can<br \/>\nreceive automatic forgiveness. Yet the devil is in the details.<\/p>\n<p>Despite bipartisan support and inclusion in the\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cramer.senate.gov\/news\/press-releases\/sen-cramer-ppp-loan-forgiveness-bill-included-in-bipartisan-covid-19-relief-proposal\" class=\"icon none\">latest COVID-19 Relief Proposal<\/a>, this bill risks re-creating the same rushed atmosphere seen during the drafting of the CARES Act. <\/p>\n<p>Despite most businesses operating in good faith, mass confusion about the changing guidelines has meant many have not complied with the terms for forgiveness. To force desperate business owners to sign a legally binding document not only risks their reputation but also the income in which they depend on. They may be in purgatory now, but finding out later that they signed off on fraudulent documents could lead to somewhere much worse. <\/p>\n<p>The burden should be on the shoulders of the SBA, not the businesses struggling to survive.<\/p>\n<p>Until the SBA announces application decisions (or at least when to expect decisions), these businesses will be stuck wondering whether they were given a life raft or an anchor.\u00a0<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.vox.com\/21529071\/ppp-loan-forgiveness-lenders-sba-delay-paycheck-protection-program\" class=\"icon none\">Kevin Brown<\/a>, owner of Smart Set, articulated this frustration well when he said, \u201cI\u2019ve never asked for charity from the government. I\u2019m very much committed to holding up my end of the bargain. But at some point it\u2019s like, what\u2019s the government\u2019s end of the bargain?\u201d<\/p>\n<p><em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cato.org\/people\/nicholas-anthony\" class=\"icon none\">Nicholas Anthony<\/a> is a research associate at the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/cato.org\" class=\"icon none\">Cato Institute<\/a>\u2019s Center for Monetary and Financial Alternatives. Follow him on Twitter <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/econwithnick\" class=\"icon none\">@EconWithNick<\/a>.\u00a0<\/em><\/p>\n<p><strong>Now read:<\/strong> Personal checks back in the mix as Congress drives toward coronavirus financial aid deal<\/p>\n<p><strong>Also:<\/strong>  Small businesses have become \u2018collateral damage,\u2019 says Warren Buffett \u2014 he urges Congress to renew PPP program <\/p>\n<p><strong>And:<\/strong> How to cut through PPP-loan confusion and avoid leaving money on the table <\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Nicholas Anthony\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Nicholas_Anthony\"><\/span>Nicholas Anthony<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B21005575-02D4-D4B5-4572-D191F32A4AF9%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Opinion: Paycheck protection program has gone from business lifesaver to a mess &#8221; Businesses still don\u2019t know if their PPP loan really will be forgiven, and that is putting the broader economy at risk The Paycheck Protection Program (PPP) was designed to be a lifeline for the businesses caught in the waves of the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":137187,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-137186","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/137186","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=137186"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/137186\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/137187"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=137186"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=137186"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=137186"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}