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You can lookup how much businesses received in PPP "loans." It's staggering. This is an anecdote, but I feel like it holds true for many small businesses. I

You can lookup how much businesses received in PPP "loans." It's staggering. This is an anecdote, but I feel like it holds true for many small businesses. I personally know a person whose business received $160k in PPP loans and after it became clear that this was not a "loan" but a "cash payout", he went out and bought two new cars and a nice new house. His business was never really at risk due to COVID, since most of his workers work solo in the field where they never have to interact with others (I used to work for him). The whole PPP process was a shame. There was very little oversight and it's becoming clear now that it was designed up front to be a giveaway to business owners. Businesses should have been forced to pay those loans back.

electrondood 4y ago
Report him for fraud. That's our money. https://sbax.sba.gov/oigcss/ https://sbax.sba.gov/oigcss/
- ndriscoll 4y ago
  As long as that person had eligible expenses to have the "loan" forgiven, it doesn't look like fraud to me. It looks like the program doesn't care that you would have spent that money on payroll anyway, so by paying part of your expenses, the money you would've spent becomes pure profit. For reference, the documentation requirements that I see talk about demonstrating your expenses, but I don't see anything about demonstrating you actually needed that money and couldn't pay those expenses yourself. Was that a requirement? https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program/ppp-loan-forgiveness https://www.sba.gov/funding-programs/loans/covid-19-relief-o...
- berkle4455 4y ago
  I'm not sure you understand how PPP worked. It was a forgivable loan in exchange for keeping people on payroll. What the company did with the loaned funds was not part of the agreement, as long as they met the payroll/expense requirements.
- mywittyname 4y ago
  It was not fraud. The rules were followed exactly (to my knowledge). It's just that the rules were not well thought out. The loans should have been loans -- not payoffs. If a business took a loan and still could not pay it back, they should have declared bankruptcy.
  - r00fus 4y ago
    You're correct - the legislation had fraud baked into it since it didn't have any provisions for oversight other than delegating that to a specific office (and the Sec. Treasury at the time - Trump admin appointee Steven Mnuchin - didn't do any oversight). It was entirely a corrupt endeavor and everyone knew it. The subsequent write-offs of the loans was also predictable.
tabtab 4y ago
> The whole PPP process was a sham... The plan was to get the money out the door as fast as possible to stem the pandemic recession, which is important for stimuluses to work right, based on history. If you add all kinds of paper-work to reduce fraud, it slows down the process. It was a hybrid in terms of "just send out a check" and a business loan. Perhaps in the future they should just send out a check to all businesses having a threshold # of employees.
- idiotsecant 4y ago
  Or....just send the checks to the people directly. Not sure why we need to selectively enrich one class over another.
  - Goladus 4y ago
    A failed business is more disruptive to the economy. There were programs aimed at individuals, though, such as ERAP for rent payment relief.
mirchiseth 4y ago
I believed the same as well but then last year when I went back to my family doctor after more than 1.5 years, I got to hear another version. My doctor belongs to a group of doctors who have 4-5 offices around San Francisco bayarea. They have been in business for 25+ years and I have been with them for 15+ years. I asked him how did they do during the covid. His response shocked me - he said they came very close to closing their practice and PPP was what saved them. Of course no one was visiting them during pandemic but even when things started opening up they had staff shortages. I am sure similar scenario would have happened for a lot of people and at the same time some businesses would have taken undue advantage of this as well.
- Scramblejams 4y ago
  Similar experience on the lower end of the economic spectrum. A local restaurant I love and have frequented for years was saved by PPP. As you can imagine, their employees were among the most economically vulnerable. With PPP they were able to send their people home and keep paying them during the downtime. Without that they'd have been finished. But as you acknowledge, I'm sure there was abuse. I'll bet there was a lot of it. Gov't needed to get the money out the door fast, and it did, at the cost of some oversight. Hopefully next time we'll do it smarter.
  - dwohnitmok 4y ago
    > Hopefully next time we'll do it smarter. I'm not sure how much smarter you can get. Fighting fraud and security in general is a cat-and-mouse game with a fundamental trade-off of convenience/expeditiousness vs. preventing fraud. When you need to get large amount of money out to a nation in a very small span of time, there might just be an unavoidably high floor on the amount of fraud that will happen. Because otherwise you get flooded with all sorts of heart-breaking stories of people who were denied money due to some bureaucratic inconvenience put in place to fight fraud.
    - Goladus 4y ago
      Exactly. It was a best effort move to reduce fraud and exploitation while still providing the desired benefits. You had to wager that the loan would be forgiven and you had to be approved for the loan by an established lender. Heart-breaking stories aside, it would have taken far more time and money to roll out a new government bureaucracy merely to duplicate a vetting service banks already provide.
llbeansandrice 4y ago
I've never heard someone refer to PPP loans as under the umbrella of "stimulus checks".
- lamontcg 4y ago
  Yeah that's an interesting deflection.
coward123 4y ago
Lemme share still another perspective that hasn't gotten any media time... my accountant at the time recommended we apply for EIDL instead of PPP, for various reasons. So here we sit now several years later with PPP as free money, having to start paying on our EIDL loans, all because we legit needed the money but chose the wrong option. So yeah - very, very frustrating to see the ways that so many people who clearly didn't need the money got a free government handout while those that did need the money just ended up with debt.
Goladus 4y ago
> The whole PPP process was a sham [...] it was designed up front to be a giveaway to business owners. Yes. The goal was to put money into the economy to help absorb the shock caused by short-term COVID restrictions that would otherwise have caused businesses to fail permanently. The point was to allow more businesses to "weather the storm" than otherwise. You can argue about the extent to which businesses should invest in "pandemic insurance" (however you want to define that), but the government does have an interest in stability and preventing a vicious cycle leading to economic collapse. The obvious point was to leverage the resources already available at banks to vet loan applicants and to reduce the total number of applicants in the first place. It's not perfect, but it's a reasonably good idea given the urgency. Sometimes it's reasonable to accept that some people are going to get away with cheating the system. Do the best you can and move on. Can you imagine how much MORE it would have cost and how much more money would have gone to waste, had the government just said up-front that it was free money for businesses? How much would it have cost the government to arrange for approving applicant businesses? Was it even feasible given the desired timeline?

electrondood 4y ago

Report him for fraud. That's our money. https://sbax.sba.gov/oigcss/ https://sbax.sba.gov/oigcss/

ndriscoll 4y ago
As long as that person had eligible expenses to have the "loan" forgiven, it doesn't look like fraud to me. It looks like the program doesn't care that you would have spent that money on payroll anyway, so by paying part of your expenses, the money you would've spent becomes pure profit. For reference, the documentation requirements that I see talk about demonstrating your expenses, but I don't see anything about demonstrating you actually needed that money and couldn't pay those expenses yourself. Was that a requirement? https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program/ppp-loan-forgiveness https://www.sba.gov/funding-programs/loans/covid-19-relief-o...
berkle4455 4y ago
I'm not sure you understand how PPP worked. It was a forgivable loan in exchange for keeping people on payroll. What the company did with the loaned funds was not part of the agreement, as long as they met the payroll/expense requirements.
mywittyname 4y ago
It was not fraud. The rules were followed exactly (to my knowledge). It's just that the rules were not well thought out. The loans should have been loans -- not payoffs. If a business took a loan and still could not pay it back, they should have declared bankruptcy.
- r00fus 4y ago
  You're correct - the legislation had fraud baked into it since it didn't have any provisions for oversight other than delegating that to a specific office (and the Sec. Treasury at the time - Trump admin appointee Steven Mnuchin - didn't do any oversight). It was entirely a corrupt endeavor and everyone knew it. The subsequent write-offs of the loans was also predictable.

tabtab 4y ago

> The whole PPP process was a sham... The plan was to get the money out the door as fast as possible to stem the pandemic recession, which is important for stimuluses to work right, based on history. If you add all kinds of paper-work to reduce fraud, it slows down the process. It was a hybrid in terms of "just send out a check" and a business loan. Perhaps in the future they should just send out a check to all businesses having a threshold # of employees.

idiotsecant 4y ago
Or....just send the checks to the people directly. Not sure why we need to selectively enrich one class over another.
- Goladus 4y ago
  A failed business is more disruptive to the economy. There were programs aimed at individuals, though, such as ERAP for rent payment relief.

mirchiseth 4y ago

I believed the same as well but then last year when I went back to my family doctor after more than 1.5 years, I got to hear another version. My doctor belongs to a group of doctors who have 4-5 offices around San Francisco bayarea. They have been in business for 25+ years and I have been with them for 15+ years. I asked him how did they do during the covid. His response shocked me - he said they came very close to closing their practice and PPP was what saved them. Of course no one was visiting them during pandemic but even when things started opening up they had staff shortages. I am sure similar scenario would have happened for a lot of people and at the same time some businesses would have taken undue advantage of this as well.

Scramblejams 4y ago
Similar experience on the lower end of the economic spectrum. A local restaurant I love and have frequented for years was saved by PPP. As you can imagine, their employees were among the most economically vulnerable. With PPP they were able to send their people home and keep paying them during the downtime. Without that they'd have been finished. But as you acknowledge, I'm sure there was abuse. I'll bet there was a lot of it. Gov't needed to get the money out the door fast, and it did, at the cost of some oversight. Hopefully next time we'll do it smarter.
- dwohnitmok 4y ago
  > Hopefully next time we'll do it smarter. I'm not sure how much smarter you can get. Fighting fraud and security in general is a cat-and-mouse game with a fundamental trade-off of convenience/expeditiousness vs. preventing fraud. When you need to get large amount of money out to a nation in a very small span of time, there might just be an unavoidably high floor on the amount of fraud that will happen. Because otherwise you get flooded with all sorts of heart-breaking stories of people who were denied money due to some bureaucratic inconvenience put in place to fight fraud.
  - Goladus 4y ago
    Exactly. It was a best effort move to reduce fraud and exploitation while still providing the desired benefits. You had to wager that the loan would be forgiven and you had to be approved for the loan by an established lender. Heart-breaking stories aside, it would have taken far more time and money to roll out a new government bureaucracy merely to duplicate a vetting service banks already provide.

llbeansandrice 4y ago

I've never heard someone refer to PPP loans as under the umbrella of "stimulus checks".

lamontcg 4y ago
Yeah that's an interesting deflection.

coward123 4y ago

Lemme share still another perspective that hasn't gotten any media time... my accountant at the time recommended we apply for EIDL instead of PPP, for various reasons. So here we sit now several years later with PPP as free money, having to start paying on our EIDL loans, all because we legit needed the money but chose the wrong option. So yeah - very, very frustrating to see the ways that so many people who clearly didn't need the money got a free government handout while those that did need the money just ended up with debt.

Goladus 4y ago

> The whole PPP process was a sham [...] it was designed up front to be a giveaway to business owners. Yes. The goal was to put money into the economy to help absorb the shock caused by short-term COVID restrictions that would otherwise have caused businesses to fail permanently. The point was to allow more businesses to "weather the storm" than otherwise. You can argue about the extent to which businesses should invest in "pandemic insurance" (however you want to define that), but the government does have an interest in stability and preventing a vicious cycle leading to economic collapse. The obvious point was to leverage the resources already available at banks to vet loan applicants and to reduce the total number of applicants in the first place. It's not perfect, but it's a reasonably good idea given the urgency. Sometimes it's reasonable to accept that some people are going to get away with cheating the system. Do the best you can and move on. Can you imagine how much MORE it would have cost and how much more money would have gone to waste, had the government just said up-front that it was free money for businesses? How much would it have cost the government to arrange for approving applicant businesses? Was it even feasible given the desired timeline?