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Treasury Posts Guidance To Stop PPP Loans From Going To Large Companies After Small Business Owners Shafted
Three weeks and hundreds of billions in misappropriated loans later, the Treasury Department has issued guidance intended to stop banks from issuing Paycheck Protection Program loans to large companies. The guidance comes after national outrage over banks such as JPMorgan prioritizing loans to large, public companies over small businesses struggling during the COVID-19 pandemic, which the funds were intended for in the first place. After they got caught, JPMorgan announced that they were working with the Treasury department to adjust the distribution qualifications for the next round of funding. That's nice, but it doesn't help small business owners who continue to struggle amid the pandemic - which resulted in a lawsuit filed last week in a Los Angeles federal court over the debacle.
In a Thursday Op-Ed in the Wall Street Journal, Sen. Ron Johnson (R-WI) writes:
With the rapid deployment of support through the Paycheck Protection Program, it has become clear that access to the forgivable loans hasn’t been limited to those who truly need them. The PPP was intended to support small employers that otherwise would have had to lay off employees because of coronavirus-related revenue loss. Keeping employees connected to employers provides wage and benefit continuity, and we hope it will help ensure a faster recovery.
But the minimal requirements for loan qualification, designed to speed relief, have allowed employers to obtain PPP loans even if they aren’t in financial distress and have no need or intention to lay workers off. Loan applications granted on a first-come, first-serve basis quickly depleted the $349 billion fund, and many deserving small businesses were crowded out, unable to obtain financial relief. On Tuesday the Senate passed a bill that provides another $310 billion for PPP. It places no further limitations on loan forgiveness, and the self-certification of economic harm required by applicants remains a nebulous statement that “current economic uncertainty makes [the] loan request necessary to support the ongoing operations” of the business.
Johnson proposes adding forgiveness limitations to PPP funds based on ability to repay, which would apply to all loans - including those granted under the Cares Act. It would allow no forgiveness for companies whose 2020 taxable income exceeds that of 2019, while full forgiveness would be limited to companies whose 2020 gross receipts are less than 60% of the preceding year's.
Those in between would be eligible for forgiveness on a sliding scale: 10% of the loan if 2020 gross receipts are 90% or higher of 2019’s; 30% forgiveness for 80% to 90% of 2019 gross receipts; 50% forgiveness for 70% to 80% of 2019 gross receipts; and 75% forgiveness for 60% to 70% of 2019 gross receipts. In no case would forgiveness exceed the loan amount less after-tax income.
Tax-exempt nonprofits would receive loan forgiveness based on net assets - with none going to entities whose 2020 net assets exceed those for 2019 or are more than 2x the loan amount.
At the end of the day, Johnson says that the abuse within the PPP system shohld be remedied, which will ultimately help people and businesses which have 'borne the brunt of the coronavirus's economic destruction.'
https://www.zerohedge.com/economics/treasury-posts-guidance-stop-ppp-loans-going-large-companies-after-small-business-owners
5 P-8's and 2 P-3's out of NAS Jax-busy
CACTUS9 C-560 nw from Ft. Worth NASJRB and 2 US Navy Clippers. CNV4981 taking off now CNV4122 at gate area from New Orleans
C202 US Coast Guard G5 from Reagan National to Plattsburgh Int'l and fly-bys: frozen at 1250 ft now just shy of the runway
yes and all the while discouraging newbs from coming in with the "content". Went through this trying to explain what goes on to some in late 2018. They stayed for a bit but then could not take it.
LOLA24 E-6B Mercury TACAMO west from Tinker AFB and SNTRY E-3B Sentry AWACS out too.
AZAZ0909 C-560 starting a descent into Fayetteville AR-Walmart land
they lasted longer than I thought and I did prep them-they made it through the prolapse stuff. have not heard from them since the virus crap started. Were not very receptive to any explanation I could provide. Watch too much tv