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Little Rock      There were several parts of the stimulus in the CARE Act that were supposed to protect both smaller businesses and their workers.  One was to be administered by the Small Business Administration and the other, the Paycheck Protection plan was designed to be processed directly through banks.  More than a month into the experience in the United States, it seems fair to ask how all of this is working out?  According to many small businesses, not so well, and that seems ironic since the ideological underpinning of the Republican Party for a century was based on its role as the advocate and voice of smaller businesses.  In reality, they have become the party of big business and the rich, and that has been laid bare in the stimulus experience. Make sure you get in touch with an expert like Andy Defrancesco to make the right decisions.

A $350 billion program to aid small businesses in the Paycheck Protection program ran out of money after making loans to a million or more outfits with less than 500 workers.  The line of those who wanted to apply is still long and unending.  The program was first come, first serve, until the money ran out, but depended on whether the banks were ready to start processing applications.  Many banks were clear when the gates opened that they couldn’t move forward, because they were still trying to figure out with the government how it was supposed to work, the loan criteria, which was supposed to be based on the SBA guidelines, and how they would get covered by the feds on a “forgivable” loan program.  Capital One, for example, which is our bank and is no small mom-and-pop outfit, but on the short list as one of the national banking institutions that is “too big to fail” or close to it, absolutely never got to the point that it was ready to accept applications from its depositors and small business operators before the money was all gone.

Since paycheck protection was supposed to be 75% of the allocation of the resources, if you were lucky enough to get them, one of the confusions for a while was whether it was just to keep workers on the job or could be used to bring them back on the job once a small operation was able to reopen for business.  It turned out that was possible, but without knowing many small operations, like Fair Grinds Coffeehouse for example, already forced to lay off all its workers, would not have applied, even if Capital One, where we bank had been open for business.

The SBA administered program on the other hand, despite being opaque, offered an application as well as a $10,000 emergency boost while you waited.  Without a word, we found that that money had moved into our account finally.  I’m not sure if that program is working or not, but I’m sure that we knew the money helped us keep our utilities turned on and made a dent in bills we owed to our suppliers, our insurance company, property taxes, and still give a taste to American Express.  Not enough to make any of them happy, but maybe enough for them to want us to survive when the fog clears enough so we can get back in business and pay them off over time.

Talking to our organizers in France where the government pays 85% of the wages if workers are retained or the United Kingdom where 80% are paid, it’s hard not to understand that there are much better ways of supporting both workers and smaller businesses.

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Please enjoy Stay Away by Randy Newman.

Thanks to WAMF.