Small-Business Rescue Shows Not All States Are Created Equal - Printable Version
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Small-Business Rescue Shows Not All States Are Created Equal - 2006alum - 04-19-2020
Great. Now there's at least correlational evidence suggesting partisan favoritism affected who goat SBA loans:
[tweet]https://twitter.com/business/status/1251984181522989057?s=20[/tweet]
Per Bloomberg, NY, CA, and DC were the three jurisdictions that had the lowest ratio of eligible payroll to loan $ approved. There are, of course, other potential explanations:
Quote:Ernie Tedeschi, the Evercore analyst who calculated the eligible payroll figures, offered a few theories about why the imbalance arose in an April 15 note. One was that regions hit harder by the virus, or that had the earliest lockdowns, may have had more trouble getting lending started. Another was that more businesses in hard-hit states may not have applied because the program isn’t enough to make a difference for them. Tedeschi also floated the possibility that businesses in some states had better pre-existing relationships with community banks that were able to get applications submitted quickly.
The trouble with this is that my friends who got nothing from the SBA had "pre-existing relationships with community banks" and were told that they were beat out by bigger banks like Wells Fargo and Bank of America. Then again, my friends are all in reliably blue coastal states...
RE: Small-Business Rescue Shows Not All States Are Created Equal - burger - 04-19-2020
I read somewhere that CA and TX still got the most total money (not per business), so the allocation wasn't as horrible as it could've been. Still, that map makes it look like SBA came up with some dumb allocation system to make sure that small states didn't get left out. Kind of like the
electoral college for small businesses. And just as unfair, if not more so.
RE: Small-Business Rescue Shows Not All States Are Created Equal - oregontim - 04-19-2020
My business in Oregon got a much-needed payroll protection loan. Blue state and via a small community bank, not one of the big banks. The check came Friday. 80 employees.
So I guess we're a counter example.
RE: Small-Business Rescue Shows Not All States Are Created Equal - Scooter_Stepford - 04-19-2020
(04-19-2020, 02:31 PM)2006alum Wrote: Great. Now there's at least correlational evidence suggesting partisan favoritism affected who goat SBA loans:
[tweet]https://twitter.com/business/status/1251984181522989057?s=20[/tweet]
Per Bloomberg, NY, CA, and DC were the three jurisdictions that had the lowest ratio of eligible payroll to loan $ approved. There are, of course, other potential explanations:
Quote:Ernie Tedeschi, the Evercore analyst who calculated the eligible payroll figures, offered a few theories about why the imbalance arose in an April 15 note. One was that regions hit harder by the virus, or that had the earliest lockdowns, may have had more trouble getting lending started. Another was that more businesses in hard-hit states may not have applied because the program isn’t enough to make a difference for them. Tedeschi also floated the possibility that businesses in some states had better pre-existing relationships with community banks that were able to get applications submitted quickly.
The trouble with this is that my friends who got nothing from the SBA had "pre-existing relationships with community banks" and were told that they were beat out by bigger banks like Wells Fargo and Bank of America. Then again, my friends are all in reliably blue coastal states...
One problem with this view is that for a good portion of the window Wells Fargo couldn’t submit loan requests to the SBA. They were being sanctioned for their past misdeeds and were restricted to $10b in new loans. It took several days for the sanction to be lifted. By then, the PPP funds were nearly exhausted.
Since WFC is a monster player in many ‘blue’ states—and a common prerequisite for applying is an existing banking relationship— I wonder how much of the allocation disparity can be attributed to their sordid history and resulting penalty?
Hopefully, 1) Congress decides to put their constituents first and pass the $250b extension sooner rather than later, and 2) WFC has taken this interlude to up their game. (Spoken selfishly as WFC is my wife’s business’ bank.)
OregonTim’s report of success is the first I’ve heard — other than Ruth’s Chris(!) — of a business receiving PPP funds.
RE: Small-Business Rescue Shows Not All States Are Created Equal - rudruff - 04-19-2020
We got one as well in California. I don't think the disparity was purposeful so much as the banks were figuring it out as the program was opening. We deal with a bunch of community banks and all the loan officers were unsure of the details. Most of them were only doing business with existing customers.
A bigger bank with more automation to handle customers would be handicapped to a much larger extent.
RE: Small-Business Rescue Shows Not All States Are Created Equal - OutsiderFan - 04-20-2020
The federal government always looks at total numbers, without per capital or cost of living considerations. Case in point: Make less than $75k and you get $1200. Make $100k and get almost nothing. But $100k in San Jose gets you less than $75k in South Dakota.
So CA may get the most money from these rescue programs, but on a per capita basis it is well behind other states. It’s the same bullshit thinking that gives South Dakota and CA 2 Senators each when CA is 40x bigger and powerful than South Dakota and should always have at least 10% influence over the Senate rather than its measly 2%.
RE: Small-Business Rescue Shows Not All States Are Created Equal - Mick - 04-20-2020
(04-20-2020, 05:26 AM)OutsiderFan Wrote: The federal government always looks at total numbers, without per capital or cost of living considerations. Case in point: Make less than $75k and you get $1200. Make $100k and get almost nothing. But $100k in San Jose gets you less than $75k in South Dakota.
So CA may get the most money from these rescue programs, but on a per capita basis it is well behind other states. It’s the same bullshit thinking that gives South Dakota and CA 2 Senators each when CA is 40x bigger and powerful than South Dakota and should always have at least 10% influence over the Senate rather than its measly 2%.
Bullshit thinking, a/k/a that pesky Constitution... :D. And thrice-damned Article V which prevents any change.
I'd rather abolish (or supplement) Congress in favor of a national initiative system with periodic (and more frequent) voting. No single politician can represent any individual. I'd rather represent ourselves, majority vote. Take every major topic, delineate it, then vote.
RE: Small-Business Rescue Shows Not All States Are Created Equal - OutsiderFan - 04-20-2020
(04-20-2020, 06:16 AM)Mick Wrote:(04-20-2020, 05:26 AM)OutsiderFan Wrote: The federal government always looks at total numbers, without per capital or cost of living considerations. Case in point: Make less than $75k and you get $1200. Make $100k and get almost nothing. But $100k in San Jose gets you less than $75k in South Dakota.
So CA may get the most money from these rescue programs, but on a per capita basis it is well behind other states. It’s the same bullshit thinking that gives South Dakota and CA 2 Senators each when CA is 40x bigger and powerful than South Dakota and should always have at least 10% influence over the Senate rather than its measly 2%.
Bullshit thinking, a/k/a that pesky Constitution... :D. And thrice-damned Article V which prevents any change.
I'd rather abolish (or supplement) Congress in favor of a national initiative system with periodic (and more frequent) voting. No single politician can represent any individual. I'd rather represent ourselves, majority vote. Take every major topic, delineate it, then vote.
Spoken like a Libertarian. Hey, I love the idea, but it's just not practical. There are too many details that must be worked out on too many issues.
Making sure as many people vote as possible, in the current flawed system, would be a good middle ground. The more people participate, the more democracy - which is ultimately a marketplace of ideas - works.
RE: Small-Business Rescue Shows Not All States Are Created Equal - BostonCard - 04-20-2020
(04-20-2020, 09:34 AM)OutsiderFan Wrote:(04-20-2020, 06:16 AM)Mick Wrote:(04-20-2020, 05:26 AM)OutsiderFan Wrote: The federal government always looks at total numbers, without per capital or cost of living considerations. Case in point: Make less than $75k and you get $1200. Make $100k and get almost nothing. But $100k in San Jose gets you less than $75k in South Dakota.
So CA may get the most money from these rescue programs, but on a per capita basis it is well behind other states. It’s the same bullshit thinking that gives South Dakota and CA 2 Senators each when CA is 40x bigger and powerful than South Dakota and should always have at least 10% influence over the Senate rather than its measly 2%.
Bullshit thinking, a/k/a that pesky Constitution... :D. And thrice-damned Article V which prevents any change.
I'd rather abolish (or supplement) Congress in favor of a national initiative system with periodic (and more frequent) voting. No single politician can represent any individual. I'd rather represent ourselves, majority vote. Take every major topic, delineate it, then vote.
Spoken like a Libertarian. Hey, I love the idea, but it's just not practical. There are too many details that must be worked out on too many issues.
Making sure as many people vote as possible, in the current flawed system, would be a good middle ground. The more people participate, the more democracy - which is ultimately a marketplace of ideas - works.
The Swiss do a fair bit with federalism and direct democracy.
https://www.ch.ch/en/demokratie/political-rights/referendum/
BC
RE: Small-Business Rescue Shows Not All States Are Created Equal - M T - 04-21-2020
I work at a medium sized company near Stanford. We have a credit union tied to our company. It reported
Quote:When Congress approves more funds for the Paycheck Protection Program (PPP), the credit union will be ready to fund your small business PPP loan. In the first round, we were able to fund about 20 loans totaling approximately $6 million. The first round of funding was over in 14 days and the second round will likely last two to three days.
RE: Small-Business Rescue Shows Not All States Are Created Equal - Snorlax94 - 05-01-2020
My business had its PPP loan application approved last night and was funded today.
I felt like the odds were stacked against us because we primarily use Chase Bank, and we're in California, and I read each of those was a strike against us. We did jump on the application as early as possible, if that helped, but we went through the normal website submission and never had any kind of personal attention.
I did inquire with the Stanford Federal Credit Union and was told they were not doing PPP loans.
RE: Small-Business Rescue Shows Not All States Are Created Equal - BostonCard - 05-01-2020
One thing I read was the SBA briefly shut down the portal for large banks, so that smaller banks (and their customers) could get applications in. Of course, that doesn't help if you are a small customer with a big bank.
This is the case where you have a trilemma between speed, fairness, and cost necessarily pull in opposite directions. You can design the program to get the money out fast, or you can have it done so that every business that qualifies can get it, or you can do it for cheap, but you can't do all three.
BC
RE: Small-Business Rescue Shows Not All States Are Created Equal - Snorlax94 - 05-11-2020
FYI-
I had previously posted that the Stanford Federal Credit Union had informed me they were not accepting PPP loans.
I got an email from them this morning saying they now do, though I don't know how much money is left.
RE: Small-Business Rescue Shows Not All States Are Created Equal - BostonCard - 05-11-2020
Also, with a h/t to Marketplace, apparently the second round of the small business rescue benefitted some of the previously neglected states more. It turns out that certain smaller banks were advantaged in the original plan, so smaller states (whose banks tend to be smaller) saw a larger share of their businesses funded.
BC
RE: Small-Business Rescue Shows Not All States Are Created Equal - BigEasyCard - 05-12-2020
(05-01-2020, 05:06 PM)Snorlax94 Wrote: My business had its PPP loan application approved last night and was funded today.
I felt like the odds were stacked against us because we primarily use Chase Bank, and we're in California, and I read each of those was a strike against us. We did jump on the application as early as possible, if that helped, but we went through the normal website submission and never had any kind of personal attention.
I did inquire with the Stanford Federal Credit Union and was told they were not doing PPP loans.
Similar experience here. Chase business customer and SFCU personal customer. Submitted PPP application to Chase on 4/6. Rejected on 4/24 due to insufficient payroll documentation. Resubmitted same day. Approved April 30 and funded May 1. Very glad to have these funds in these uncertain times.
Geaux Cardinal!
RE: Small-Business Rescue Shows Not All States Are Created Equal - 2006alum - 05-14-2020
Glad to hear your loans came through! Not at all glad to hear this guy's $27 million grant did, too:
[tweet]https://twitter.com/CNBC/status/1260914968104505344?s=20[/tweet]
Quote:A private jet company owned by a donor to President Donald Trump received nearly $27 million in government funding under a program run by the Treasury Department, according to government filings.
Clay Lacy Aviation, a private jet charter company based in Van Nuys, California, that serves wealthy executives and celebrities, received the government grant as part of the CARES Act, a $2 trillion federal stimulus package aimed at supporting jobs during the coronavirus crisis.
The company appears to have received the largest grant of any private jet company on the list. The vast majority of the other 96 recipients of government funding or loans on the list are major commercial airlines, regional carriers or support companies.
The funding is a grant rather than a loan, and doesn’t need to be repaid to the government. The money is part of the CARES Act program to “compensate aviation industry workers and preserve jobs.”
Clay Lacy didn’t return calls for comment. A spokesperson for the Treasury Department didn’t respond to a request for comment.