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

It looks like certain broke states (like Illinois) are looking for ways to keep funds from the $2.2 Trillion Employer/Worker assistance package too.

""Pritzker spokeswoman Jordan Abudayyeh told the Sun-Times today, “The U.S. Department of Labor took weeks to roll out stringent and confusing regulations around how to implement an entirely new program.

“The state of Illinois is working through those regulations now and is contracting with an outside firm to help us stand up the additional benefits for 1099 workers in the coming weeks, but it’s clear the Trump administration is working to limit who qualifies for benefits.”"

More at: chicago.suntimes.com...


The DOL rules came out within 7 business days of the "Cares Act" ($2.2 Trillion Employer Support fund) being signed into law on March 31st. Not "weeks" later.

Unlike Michigan, whose system will be ready to accept 1099 workers and Self-Employed tomorrow, the Pritzker (Illinois) administration seems to be looking for a way out...a scapegoat.

originally posted by: Daughter2

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.

Only 25% of the funds can be used for other than payroll or that amount will not be forgiven. I was confirmed on Friday for a PPP loan, we are using a separate account to keep a very clean and accurate accounting of the funds. Hopefully, I can keep my people busy on projects that generates revenue. If so, those profits will help us survive on the back side of this thing. This year I don’t expect anything less than a 25% recession. Next year Who knows, we are in uncharted waters here.

a reply to: Daughter2

April 15th 2020

The paycheck Protection Program has helped tons of small businesses all across America. I monitor it.

They have been receiving vital funds being used to keep employees on the payroll..

But unfortunately, the money runs out at the end of business today.

The fund will be broke, and Chuck Schumer is refusing to work with Mitch McConnell to replenish it with 250 billion dollars.

a reply to: Nickn3

Today it came to my attention that we could not expense the funds used from the Payroll protection program. So except to pay about 25% of it back, in taxes next April.

A little update - only 60% needs to be spent on payroll and they have 24 weeks to use that money on payroll. People don't need to be hired back until December and even then there are so many loopholes, it's not really a requirement.

So I guarantee when this all shakes out, almost all the funds will have been used to pay management making the max 100k a year and the rest to the banks for rent and mortgage.

www.forbes.com...