04/26/2020
So I have debated for weeks now on whether I should write this or not.... .But after downloading and skimming the entire CARES act the day it passed I feel I have to at least throw in my 2 cents... So it all started with this term "delegated Authority"...taken directly from the CARES act...
‘‘(ii) DELEGATED AUTHORITY.- IN GENERAL.—For purpose of making covered loans for the purposes described in clause a lender (ie Big Bank) approved to make loans under this subsection (the PPP sub section) shall be deemed to have been delegated authority by the Administrator to make and approve covered loans, subject to the provisions of
this paragraph."
What that little clause has lead to is eye opening.. Thanks to Eric Groves for the helping put words to it, see below:
The Truly Ugly:
JP Morgan Chase will receive over $200 million in loan processing fees for loans already approved. They did 27,000 loans at an average of $500,000 per loan. Whereas the 15th leading lender did over 40,000 loans at an average of $73,000 per loan and will make a modest $30 million in fees. Does that seem right to you?
Note: SBA doesn’t release the actual names of lenders and the fees they have generated… thinking they probably should)
Minority, Women, and Veteran Owned businesses get less loans approved than peers.
*******Solopreneurs, Independent Contractors, and Self Employed were kept from applying until the money was almost gone. (They only represent the largest segment of small businesses)
45% of the Relief Funds went to 4% of the businesses who applied all of whom have over 100 employees. (IMO these are not "small businesses")*****
The top 15 banks will pocket over $1 Billion in processing fees.
Congress approves giving these same banks more money with the same rules in place. ( what are you thinking)
It seems a little ironic states with the highest percent of businesses getting support (Montana, Wyoming, Mississippi, South Dakota, Arkansas, Nebraska, Maine, Oklahoma, Idaho, North Dakota) are the ones who are most vocal about limiting federal spending.
Washington DC is the worst place to be as a small business owner in terms of relief. You have the lowest percentage of payroll covered by CARES Act.
If you are stil reading check out all Eric Groves had to say here.
Explore our latest rundown on how the CARES Act affected small business, including info on the second round of funding and how to reach out to Congress.