3 ms·

FWIW, the banks didn’t feel like it was 0 risk, many of them were doing a lot of due diligence, document checking, etc. because they were worried about it. I’v

FWIW, the banks didn’t feel like it was 0 risk, many of them were doing a lot of due diligence, document checking, etc. because they were worried about it. I’ve seen stories of small business owners talking about how difficult it was to get the loan through due to having to go back and forth with documents etc. although I’m sure it varied per bank. 2.8% doesn’t seem like that much for me, especially considering the goal was to get the money out the door as fast as possible due to the emergency, and setting up and hiring a government bureaucracy to administer and give the loans would have cost far more in time than the solution of giving it through the banks.

dylan604 7y ago
Why did it need to be a bank to begin with? Are banks involved when the government hands out low interest loans for natural disasters. Do they take cuts from that money? If so, I've never heard of it before. What about the 9/11 fund? Did banks get a cut of that money as well? Why is this situation different?
- javagram 7y ago
  The goal here was to give the money out ASAP as businesses and their employees had already been forced to shutter by the pandemic and lockdown orders and were rapidly marching toward insolvency. Stuff like the 9/11 compensation fund was on a much longer timeline and was also much smaller - the 9/11 fund was open ended, but ended up being about $7 billion, compared to the $349 billion PPP. Remember the PPP is intended to give out money to the entire country and that is a huge scale. There was no available mechanism to give out the money, the SBA administers a EIDL grant/loan program but lawmakers on both sides of congress didn’t believe the SBA could give the money out fast enough, so this system of having the banks get money from the SBA was created.

3 ms·

FWIW, the banks didn’t feel like it was 0 risk, many of them were doing a lot of due diligence, document checking, etc. because they were worried about it. I’v

by javagram 7y ago

dylan604 7y ago
Why did it need to be a bank to begin with? Are banks involved when the government hands out low interest loans for natural disasters. Do they take cuts from that money? If so, I've never heard of it before. What about the 9/11 fund? Did banks get a cut of that money as well? Why is this situation different?
- javagram 7y ago
  The goal here was to give the money out ASAP as businesses and their employees had already been forced to shutter by the pandemic and lockdown orders and were rapidly marching toward insolvency. Stuff like the 9/11 compensation fund was on a much longer timeline and was also much smaller - the 9/11 fund was open ended, but ended up being about $7 billion, compared to the $349 billion PPP. Remember the PPP is intended to give out money to the entire country and that is a huge scale. There was no available mechanism to give out the money, the SBA administers a EIDL grant/loan program but lawmakers on both sides of congress didn’t believe the SBA could give the money out fast enough, so this system of having the banks get money from the SBA was created.