Many small businesses say loans won't get them to rehire

[Yo_Mama_Been_Loggin]

Some small businesses that obtained a highly-coveted government loan say they won’t be able to use it to bring all their laid-off workers back, even though that is what the program was designed to do.

The Paycheck Protection Program promises a business owner loan forgiveness if they retain or rehire all the workers they had in late February. But owners say the equation isn’t so simple, in part because of current economic conditions and partly due to the terms of the loans.

As a result, the lending may not reduce unemployment as much as the Trump administration and Congress hope.

The government’s $2 trillion relief package included $349 billion for the small business loan program, which was besieged with applications and ran out of money Thursday. Congress and the White House reached a deal Tuesday that would provide another $310 billion.

https://www.msn.com/en-us/money/smallbusiness/many-small-businesses-say-loans-wont-get-them-to-rehire/ar-BB132LnD?li=BBnbfcN

A large part of the problem is many businesses getting those loans are not small businesses.

[leftieNanner]

1. I'm on the Board of a local non-profit

And we are trying to get one of those loans for the very reason - paying our employees. The entity is an equine rescue and our employees cannot be laid off except in the most extreme circumstance. 59 horses won't muck out their own stalls nor put hay in their bins. But we have had a challenge getting the money because the big boys took it all. Hopefully, in this second wave, we will get lucky. We can't close our doors, we can't go out of business, we can't file bankruptcy. The horses don't care about politics. I know. I've asked them.

[Igel]

2. Small business, small storefronts,

same problems. You work as one out of 25 employees for one out of 1000 storefronts and it's very much like working as one out of 25 employees for a single-storefront small business. People insist that it's for the *employee* and then turn around firm in their belief that what they said doesn't matter, it's really for the company.

Say one thing, think a second, do a third. We're 2/3 of the way to personifying that particular slogan.

I worked it out and if I'm unemployed at $60k/year I'd get 96% of my income until end of July. If I made $58k/year, I'd get 100% of my income. At that point I'd rather be laid off for 3 months than drag myself to a job. Esp. if there was nothing to do at the job because the business was closed. Or even more so if the business were open and I had to deal with people.

Anything less, at least in TX, and I'd be making more money unemployed. If I worked for a restaurant and made $25k/year, my employer would be hurting me financially to call me back. If I went, I'd make less--a lot less; if I didn't go back, I'd lose benefits. How nice, putting employers in that particular situation.


Then there's the values gap. Do you want to hire employees, if you're a restaurant, and tell the people to go home? As the article puts it, it's turning businesses into pass-through channels for government faux unemployment.