$349 Billion Gone in Fourteen Days

Well, that didn’t last long. The $349 billion appropriated for the CARES act and the Paycheck Protection Plan, which was a major component of the Act, ran out after about 2 week. Of course, it did not help that several chains, such as Ruth’s Chris Steakhouse and Potbelly Sandwich Shop applied for loans/grants under the program and received $10 million each ($20 million in the case of Ruth’s Chris Steakhouse, since the corporation had two different subsidiaries apply), the maximum allowable under the PPP.  Under the plan, the government considered any business employing fewer than 500 people a small business. With the average loan, according to the SBA, running just under $240,000 and over 1.3 million loans, at least, approved, it is no wonder the program ran out of funds so quickly. I do find it interesting that, since the CARES Act does not require the SBA to release loan/grant amounts, it has declined to do so. The only reason we know about the $10 million loans some corporations received is because they are publicly traded corporations and required by law and their charters to make that sort of information publicly available. Privately held companies and corporations are under no such requirement and have no legal obligation to do so. Several members of Congress are pushing the SBA to release the names of organizations that received CARES loans. We will see if their badgering of the SBA, which gave out more money in the past fourteen days than it had loaned out in the past 14 years, pushes the SBA to make public the names of other companies that received loans.

Meanwhile Congress is looking at putting more money into the PPP but the plan has run into an impasse  with some members of Congress wanting to just appropriate more money for the PPP as it stands, while others want to add wording to a second funding proposal that targets more new funds towards more specific parts of the economy, including hospitals , state and local governments and food assistance.  Until some agreement is reached, which will probably include adding the extra funds for hospitals and state and local governments,  we should not expect to see any more money coming immediately from the Federal Government, unless you are someone who gets your tax refund in the form of a check, in which case you can expect to see those funds show up anywhere from early May through mid-September.