Banks warn that new small-business funding could evaporate in 2 days

[RandySF]

Lawmakers are nearing a deal to restart an emergency small-business loan program that exhausted its funding last week — but it may buy only a few days before the program screeches to a halt once again.

Lenders are warning their customers they might not be able to secure loans even if Congress provides an additional $300 billion as soon as this week. Banking industry representatives say the program has a burn rate of $50 billion per day and needs closer to $1 trillion to meet demand, with hundreds of thousands of applications pending.

"This is going to go within, at most, 72 hours," said Consumer Bankers Association President Richard Hunt, who represents large banks. "But the odds are more like 48 hours."

The legislation also likely won't tackle controversial elements of the program’s structure, chiefly an exemption that allowed large companies such as Shake Shack and Ruth's Hospitality Group to obtain tens of millions of dollars in loans, as well as rules that encouraged banks to favor their existing customers.




https://www.politico.com/news/2020/04/20/bank-small-business-funding-coronavirus-197372

[elleng]

1. Sure will, if they give it away the way they did the first 'tranche,'

to other than REALLY small businesses.

HOPE Congress places rational restrictions.

[Amishman]

3. Pubs are desperate to pass it, we should make that our condition

And get this thing done. I get using the leverage but holding this up much longer could really backfire

[getagrip_already]

2. some of those loans had to be astronomical.....

even at $10M a whack, that is 30,000 loans. They can't have given out a fraction of that number.

[Amishman]

4. They gave out many times that

The smallish bank I work for gave out 7k loans totalling a bit over a billion dollars and we're only in a couple states. We recieved over 15k applications.

Just about every small business is putting in for them, they are in a lot of trouble.

[elleng]

5. WOW!

[getagrip_already]

8. hmmm, so an average of about $15k?

That puts those $10M loans to the restaurant and hotel industries into focus.

[Amishman]

10. Your math is off by a decimal place

I think we were around 1.25 billion dollars and 7k loans, so averaged around 178k each.

I'm not involved in the lending end, my side project for a few days was working on a way to automate part of the entry into e-tran, the gov's system for the loans. The program ran out before we could try my toy.

[getagrip_already]

11. yeah, I wasn't on it I guess.....

Still, giving out loans 10x the average to large restaurant chains (and this was on the small end of large) like shake shack is a glaring smack in the face of who that money was intended for.

That was my point. The money ran out in part because huge chunks were given to larger companies.

[BlueIdaho]

6. We need to revisit criteria for a "small business."

The GOP fucked this poodle a long time ago. Before we dole out any more money - it’s time to recalibrate what a small business is. It certainly isn’t a business with fewer than 500 employees per location for God’s sake.

[Windy City Charlie]

7. No doubt

As is usually the case, some were able to find a loophole and they took advantage of it, and it doesn't sound as if that loophole is going to get closed.

[BlueIdaho]

9. That may be what Dems are fighting for right now...

I wish I could be more hopeful - but I’m not.

[getagrip_already]

12. It's kind of like that mythical "family" farm...

That has hundreds of employees and millions of profit. But the "family" farms need help.....

The only thing that makes those family farms is that at one time, a sperm cell penetrated an egg cell and a child erupted. That child then inherited a large business that is now called a family farm.