The first round of Paycheck Protection Program funding was roundly criticized as chains like Ruth’s Chris Steak House, Sweetgreen, and Shake Shack received millions while many small independent businesses got nothing
allege that banks such as Chase favored larger loan applicants in order to secure bigger fees for themselves.
The “per physical location” loophole hasn’t been explicitly closed for the new round of PPP funding, but some other changes could help the replenished loans reach small businesses. $30 billion is explicitly reserved for community-based lenders, while another $30 billion is earmarked for mid-sized banks and credit unions. Andsays borrowers must certify “in good faith” that they need the loans and can’t get funding from other sources, something most publicly traded companies would be able to do.
But other problems with PPP loans for restaurants remain. To receive full loan forgiveness, a business must rehire employees by the end of June. Depending on when different states’ shelter-in-place orders are lifted, that could be an unrealistic deadline for many restaurants. And, per PPP rules, restaurants can only use 25 percent of the forgivable portion of the loan for non-payroll expenses like rent and utilities.
So far, not so good: Demand for the new round of funding has already lead the Small Business Association’s computer system for processing loans to crash,
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