Payroll Protection Program Funds will go to Big Banks instead of employees

I predict the 349 Billion Payroll Protection Program funds will mainly be used to pay banks and not employees. It needs to be renamed the more accurate The Bank Mortgage Payment Protection Program.

The place I work(ed), a small business travel related industry, held a company wide meeting on Wednesday and said they applied for a Stimulus loan on Sunday. This Friday they furloughed almost all their staff with the exception of upper management.

This probably shocked most of my co-workers because they Payroll Protection Act was advertised as an incentive to keep restaurant and hotel workers on the payroll. All the articles said something along the lines that the loan would be forgiven if 75% of the workers were kept on the payroll. They would even exclude some high earners from the calculation. Look at this article:www.cbsnews.com... This is how it was supposed to work.

I knew as soon as I actually read the act, there was going to be mass layoffs at my company because my employer will probably be using it to pay rent (which will eventually go to the big banks) and upper management.

Despite all the fancy calculations and misleading titles, this Act has two loopholes that make this the Bank Mortgage Fund Protection Act. Here they are:

1. The funds can be used on rent or mortgage payments. Any business person will pay rent before they pay employees. You don’t have long-term contracts with employees like you do with banks (funny how that works). Miss two rental payments and you are out of your business and most likely will not be able to rent again. Layoff employees for two months and you will probably be able to get replacements.

2. There is NO REQUIREMENT to use the funds pay payroll if you hire them back by June 30th. It doesn’t say how long after June 30th you have to keep them! It also doesn't totally exclude high paid employees, they still can get their first prorated $100,000. Nothing stops them from laying off five people who make 20k a year so they pay one exec 100k.

I absolutely believe they knew what they were doing when they wrote the act this way. If the intent is to protect payroll, why allow it to be used for rent and mortgage?

a reply to: Daughter2

Just heard that the payroll Protection Program has already transferred to applicants 175 billion of the 350 billion allocated.

Senator Mitch McConnell try to add an additional 250 billion dollars to the program last week, but Democrats in the Senate blocked that move.

Also, there are severe bottlenecks in the system at the banks. They have to follow specific complicated banking rules or face being audited and fined when this is all over.

The Security and Exchange Commission should waive most of those rules and then the money will flow more freely to the recipients.

a reply to: carewemust

Sorry, but I don't really care how fast Bank of America or Chase gets their check.

People think they are rushing so employees can get paid, ha!

a reply to: carewemust

Just heard that the payroll Protection Program has already transferred to applicants 175 billion of the 350 billion allocated.

Because those are the people who need it to keep paying their "bills", right?

The Security and Exchange Commission should waive most of those rules and then the money will flow more freely to the recipients.

Please explain your math

I work as a shift leader in an "essential" retail business.
The company is taking care of its employees FIRST by providing PPE, additional pay, shortened hours, and tomorrow OFF.
This is hard, people. It's hard work.

originally posted by: VeeTNA
I work as a shift leader in an "essential" retail business.
The company is taking care of its employees FIRST by providing PPE, additional pay, shortened hours, and tomorrow OFF.
This is hard, people. It's hard work.

They need to take care of you so they get paid in the end, I assure you they will benefit much more then you .

a reply to: Daughter2

It also doesn't totally exclude high paid employees, they still can get their first prorated $100,000. Nothing stops them from laying off five people who make 20k a year so they pay one exec 100k.

I am unaware of this little tidbit...source?

I absolutely believe they knew what they were doing when they wrote the act this way. If the intent is to protect payroll, why allow it to be used for rent and mortgage?

Because otherwise people would default and that hurts everyone?

How do you think it should go please?

a reply to: Gargoyle91

They need to take care of you so they get paid in the end, I assure you they will benefit much more then you .

Our sales are UP, way up above budget....we are all getting bonuses and they are sending PPE and we have the absolute right to decide how much and when we are willing to work. We are allowed to evict belligerent shoppers, and refuse un-receipted returns.....it's our way, or out.


I do work for an extraordinary company - and they genuinely care. We are given latitude to insist on social distancing and not have to deal with irate customers who demand to "exchange" the thing THEY bought without us helping them

I'd wager you can't imagine to begin to guess what corporation this is
Go ahead, take a shot.....
who are we?

a reply to: Gargoyle91

They need to take care of you so they get paid in the end, I assure you they will benefit much more then you .

Reality: The GM shared the spreadsheets with me. After ALL expenses (buying product, paying utilities, payroll, and overhead - we are a $2 million dollars a year store) the store profit is






17,000
Seventeen Thousand
per year

Not exactly rolling in the dough

a reply to: Daughter2

I think it would be much better if the government paid our bills instead of giving us money.
So many people are going to spend that money on other things instead of paying rent or electricity or food.

If their going to do it then just pay our bills and gives us a card that can only be spent on food.

a reply to: Daughter2


Just a couple of points you seem to have missed regarding the program

1) Business have until June to rehire laid off workers. Some business are laying off employees to allow said employee's to receive the enhanced Unemployed benefits.

2) The amount of the loan is 2.5 times monthly salary averaged over the 12 months prior to the loan date.

3) Forgiveness of loans only includes the expenses for eight weeks and only if 75% or more is used for payroll.

4) These are 1% loans.

5) There are companies taking the loan with no intent to seek forgiveness and using them for other purposes. They have 2 years (I believe an extension of time is in the works). Banks are not too concerned about a companies credit worthiness so for some this is the only way to get operating cash.


So - no it's not the Banks - this is another windfall for them overtime.

It's more likely the strategy of your employer.

It sucks but some companies don't even have a couple of months contingency cash or liquidity.

This process was poorly designed and badly executed. I would lay the blame (if you must) elsewhere.

I'm a socialist but you cannot 'blame' this on the Banks.

originally posted by: FyreByrd
a reply to: Daughter2


Just a couple of points you seem to have missed regarding the program

1) Business have until June to rehire laid off workers. Some business are laying off employees to allow said employee's to receive the enhanced Unemployed benefits.

2) The amount of the loan is 2.5 times monthly salary averaged over the 12 months prior to the loan date.

3) Forgiveness of loans only includes the expenses for eight weeks and only if 75% or more is used for payroll.

4) These are 1% loans.

5) There are companies taking the loan with no intent to seek forgiveness and using them for other purposes. They have 2 years (I believe an extension of time is in the works). Banks are not too concerned about a companies credit worthiness so for some this is the only way to get operating cash.


So - no it's not the Banks - this is another windfall for them overtime.
.

No, those points make no difference. The whole point of the act was to keep people in the hospitality industry employed during the shut down and to help small businesses.

The funds legally can be spent on either rent, mortgage, utilities or payroll. The way the act is written pretty much guarantees the funds will be used for rent or mortgage - which will go to the big banks- instead of payroll.

a reply to: Daughter2

The whole point of the act was to keep people in the hospitality industry employed during the shut down and to help small businesses.

An immediate family member of mine works in the up-scale "hospitality industry" and was "terminated"

If you like your job you can keep your job 🎱 👁️ 🎱

i haven't been able to even apply yet. Was supposed to be able to 2 weeks ago. They keep delaying it.

I have the bank calling me telling me to keep refreshing the sba website every thirty minutes because they said it will soon be available.

that was two days ago.

Still can't even apply.

140,000 business' applied the first day it opened and that was on a saturday.

We got screwed so hard. A lot of the small business owners i know are just going to call it quits.

a reply to: xuenchen

If you like your job you can keep your job 🎱 👁️ 🎱

Really sucky thing to say

a reply to: VeeTNA

Why? You seem happy about your job and having it. A lot of people could really use the work and money right now.

a reply to: Daughter2

Not to mention that soon after the government decided to print money to give to the banks so they could lend to the people... the banks decided 0.05% interest was not worth their time for lending the taxpayers money back to the taxpayer.. so the government acquiesced to their banker buddies and set the rate at a cool 1% interest.

Government Doubles Interest Rate on SBA Loans After Banks Complain

Once again the people lose, and the 2008 "crash" was just a trial run for 2020.

a reply to: Philippines

Why? You seem happy about your job and having it. A lot of people could really use the work and money right now.

Do you put your life on the line every morning to go help people?

I actually don't need the money right now. I'm doing it because that's what I do. Go out on the front lines and try to help. Hardware stores will never go out of style.

originally posted by: VeeTNA
a reply to: Philippines

Why? You seem happy about your job and having it. A lot of people could really use the work and money right now.

Do you put your life on the line every morning to go help people?

I actually don't need the money right now. I'm doing it because that's what I do. Go out on the front lines and try to help. Hardware stores will never go out of style.

Nope, I'm not a nurse or a doctor working to save people's lives every day. As a person who works at a hardware store, what tools do you prefer to use when saving lives?