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Bank of America: 58,000 small businesses ask for $6B in loans since 9 a.m
- brink 7y agoA little off topic. I find it really weird that journalists have tried to paint this recession in light of other recessions. It feels like apples and oranges trying to compare the two. We've effectively shut the economy off, yet people still act surprised when 6M apply for unemployment. It feels a bit like putting cake batter in an oven and being surprised that you pull out a cake 45 minutes later.
- emiliobumachar 7y agoIt's news. As obvious as it may be, it's close enough to unbelievable that it's still sinking in for most people.
- Brendinooo 7y agoI live in Western PA and work with people in NYC. Hard to quantify this, but I felt about a week behind New Yorkers in getting serious about it, and about a week ahead of people around me. Gotta be harder to not see it at this point, but don't count out the inability of people to comprehend big stuff that doesn't happen in their backyards.
- kitotik 7y agoTalking to some friends in the mid-west and some less populated flyover states, there is still a very prevalent sentiment that this is all a coastal big city problem.
- dhosek 7y agohttps://www.gocomics.com/calvinandhobbes/1986/03/12 https://www.gocomics.com/calvinandhobbes/1986/03/12
- josephjrobison 7y agoSorry, what’s the connection here?
- jolmg 7y agoWell, it's a similar metaphor to the cake-batter-in-the-oven one that brink provided, both of which are trying to highlight that it's weird to shut off the economy then being surprised that it resulted in greater unemployment, as if it wasn't obvious that one thing would cause the other.
- dhosek 7y agoWhat jolmg said. Plus, it's one of the best C&H strips ever. If it were up to me, I'd share the link in every comment thread.
- yodsanklai 7y agoI must be very naive, but I also don't understand why general lockdown has to have negative consequences. Couldn't we stop most non essential activities for a few months, feed everyone in the meantime (thanks to the work of essential workers), and just start again exactly like it was before the shutdown?
- conanbatt 7y agoYou can, albeit 70%+ retail businesses no longer exist and their former employees don't have jobs.
- azernik 7y agoFreeze mortgage payments/interest, waive rent - there are lots of ways of dealing with this, and most are all about removing any financial return on capital for the duration.
- bequanna 7y agoThis is the (horrible) idea that just won’t die. What do you propose that the parties who are due rent/mortgage payments do? Those payments aren’t simply ‘return on capital’ they pay taxes, utilities, insurance, employees.
- aaronblohowiak 7y agoA lot of people don’t realize that one person’s debt is another person’s income.
- azernik 7y agoYou cut down as much of those as possible (e.g. not making people pay utilities, as many countries/localities have done), treating nonessential employees as laid-off and needing government aid like anyone else, adding tax and insurance-premium holidays. Lots of places have approached this model very closely; there is almost always some little bit that falls through the cracks, but it's doable.
- trhway 7y ago>yet people still act surprised when 6M apply for unemployment. we're just at the first stage of grief - denial. 4 more to go.
- Der_Einzige 7y agoYet you wouldn't know it based on the stock market. Apperently all of this is "priced in"
- bequanna 7y agoThe prevailing belief is still that this will only be a several week ‘pause’ on an otherwise strong economy. Most seem to expect a V-shaped recovery.
- jdhn 7y agoThis is why I'm still putting money into my investing accounts, but not buying anything. If it's anything other than a V shaped recovery, stocks are going to be hammered, and there'll be even more buying opportunities than there are now.
- bequanna 7y agoCertainly not a bad time to have some cash.
- selectodude 7y agoEconomists have sort of walked back from that as a prevailing belief.
- oh_sigh 7y agoIt doesn't make a ton of sense to heavily discount the value of a company based on what you believe will be a short term global event.
- itake 7y ago58,000 businesses are about to get free money. Even if they don't "need" the money, they are cashing in on the deal.
- conanbatt 7y agoStockmarket is like 25% below its ATH weeks ago.
- chrisco255 7y agoI don't think people appreciate how many businesses literally go into a death cycle the minute that cash flow is cut by any significant percentage. With this shut down, it's like, 90+% of revenue cut off for entire industries. This is going to trigger a series of defaults and bankruptcies that are incalculable. These SBA loans are a bandaid. They won't prevent massive bankruptcies and economic depression if these shut downs continue for any longer.
- generalpass 7y agoMore like a bandaid on a severed artery.
- lalos 7y agoA business that doesn't have cash flow for bad times is not a business. There was a time when business weren't leveraged to the max and the profit taking during good times was not squeezed to every cent. This could easily be fixed with regulation to promote this behavior but currently the priority is to take the profits to the owners.
- generalpass 7y ago> A business that doesn't have cash flow for bad times is not a business. There was a time when business weren't leveraged to the max and the profit taking during good times was not squeezed to every cent. This could easily be fixed with regulation to promote this behavior but currently the priority is to take the profits to the owners. This may be what we read about publicly traded firms, but small businesses are in a completely different category. For example, many of them, if they do not take loans to improve their offering, will lose customers to the competition.
- notyourday 7y agoSo Nike is not a business? Cheesecake Factory is not a business? TJMAXX is not a business?
- throwaway_USD 7y ago
- skizm 7y agoThis whole ordeal has been pretty enlightening. One of the reasons I have failed to jump into something of my own (consulting, start a business, etc.) is because I am constantly thinking about how to survive the worst case scenario, and I can't come up with a fallback plan I'm happy with. It turns out the vast majority of people who have made the leap don't think about this at all, they just go. Not sure if this will change my behavior going forward, just an observation.
- mgkimsal 7y agoWith a scenario this immense, I'm not sure you're all that much more protected in a 9-5 'job' vs being a self-employed consultant. I do agree that many folks jump ahead without too much planning for the future, and... sometimes it works out, sometimes it doesn't. I've been burned a few times in the past, and while I am still self-employed, I've become a lot more cautious and reserved in my operations and personal life.
- vkou 7y agoWith this kind of scenario, if you have a 9-5 job, you have a very clear transition to unemployment. If you're a consultant... There is definitely government will and intent to help you, but you're a square peg, and the unemployment offices are still figuring out how to best fit you into a round hole.
- sickygnar 7y agoI agree. As an employee, you assume some of the same downside as the business owner, and little of the upside. If the business fails, you are out of a job. If the business does well, you might get a small raise.
- bequanna 7y agoI work a regular job and still have the fear of losing an income. For me, the best way to deal with this fear was to focus on generating some uncorrelated income outside of my job.
- superpermutat0r 7y ago
- deleted 7y ago[deleted]
- pacamara619 7y agoHaha, money printer go brrr https://brrr.money https://brrr.money
- duxup 7y agoThe loans are first come first serve. I belive a lot of folks are simply asking in case they need them. That doesn't make the need any less massive, I'm just not sure what it is.
- deleted 7y ago[deleted]
- Meekro 7y agoThe article describes this as a lending program, which is misleading. The SBA Paycheck Protection Program straight-up gives free money to cover small business (less than 500 employees) payroll for 2 months. All the business has to do is not fire anyone in the meantime. "SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities." [1] [1] https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp https://www.sba.gov/funding-programs/loans/coronavirus-relie...
- blairanderson 7y agoThe main benefit of these loans is to prevent people from going on unemployment. Which is easier: - process 300,000 SBA loans with bank employees and get 25% - 50% back - process 30,000,000 unemployment insurance filings with state agency employees and get back nothing
- tcas 7y agoBoA seems to be only letting people with some sort of loan product with them apply. > “We have to focus on the borrowing clients to make sure we can take care of them,” he said. This sounds like Bank of America is trying to help their clients that are at a default risk to themselves first, which is a bailout for themselves rather than small businesses at large.
- jason_zig 7y agoThe banks are doing everything they can to make it a challenge to file for this program. You can't really blame them since it doesn't make sense for them to be lending given that 4/5 of the amount is likely to be forgiven. This should be done through spa.gov or some other government service. For BOA you're required to have a lending product in addition to a checking account. While Chase first delayed their roll out and now are only offering a call back (with no details as to when or what they will require). I hear similar things about the disaster loans offered by the Government (not hearing back within 3 days) but at least in that case you can actually file an application. What are you supposed to do if you don't have an account with BOA or Chase? You're at the mercy of whether or not the bank wants your loan on their books. I can't see the upside in doing this through the banks other than to make it a logistical nightmare for small businesses - if anyone has thoughts otherwise I would really like to understand.
- digsy 7y ago>I can't see the upside in doing this through the banks other than to make it a logistical nightmare for small businesses - if anyone has thoughts otherwise I would really like to understand. Financial Institutions are set up already to do Know Your Customer (to prevent fraud). And they have systems/processes in place to file loans through E-Tran (needed to file a loan with the SBA). You arent hearing back instantly because FIs are completely overloaded with this and modifying existing loans/mortgages for small businesses and customers.
- mNovak 7y agoI think the logic is that banks can much more rapidly deploy money than can the government (see estimates on the regular stimulus check timeline). The issue for the banks isn't that the loans will be forgiven, that's fine, they still get an origination fee; the issue is they're liable for validating the info you provide on the application, whereby if there's an issue your loan may in fact not get forgiven, and they're stuck with it. So you're exactly right, if you already have accounts with the right banks, it's easy enough for them to verify and process the loan. But if you're an outsider, it's much harder.
- broth 7y agoTitle of news article has since been changed to: "Bank of America says 85,000 small businesses have asked for $22.2 billion in loans since 9 a.m."
- boneitis 7y agoI particularly like how the article, given its length, was published at 9.15 AM.
- OrgNet 7y agoWho doesnt want free money?
- MR4D 7y agoBofA sucks. They won’t give you a COVID-19 SBA loan unless you already have a loan in place with them before February 15th. I’ll remember that the next time they need my money to bail them out....which will probably be this summer. Selfish effing management.
- rdtwo 7y agoSo what would happen if instead of loan forgiveness the US government decided that for all existing contracts it is currently March 31st and will continue to be March 31st for the next 60 days. At that point a lot of things stop Getting but I would assume a lot of things break as well. The closest thing out there to just stopping time.