Redesign PPP to help genuine small businesses

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COVID Loan Tracker, a union of over 17,000 small business owners representing billions of dollars in Paycheck Protection Program applications, demands that the federal government increase the funding for PPP to $1tn within 48 hours.

The first round of the Paycheck Protection Program has proven that the initial conception of the distribution of funds was flawed from top to bottom. The program has done very little to help genuine small businesses and instead has benefited large companies who have used subsidiary entities to benefit disproportionately and unfairly. The examples abound. Banks have incentivized large and important customers—those who need PPP money least—at the expense of the backbone of the nation: genuine small business owners, or those who run “small” small businesses and are an intimate part of the communities they inhabit and serve. These are the people whom the program was designed to protect, and those whom have been most failed by it. 93.3% of US small business owners have received no money from the first phase of PPP, amounting to 28,000,000 businesses. This is a wrong that must urgently be made right.

In addition to increasing funding to $1 tn, we propose the following rules:

1.      50% of the total dollars funded through the program must go to businesses with 50 employees or less (with the employee count taken as of February 15th, 2020)

2.      The next 25% of the total dollars funded through the program must go to businesses with less than 150 employees (with the employee count taken as of February 15th, 2020)

3.      The next 25% of the total dollars funded through the program must go to businesses with less than 250 employees (with the employee count taken as of February 15th, 2020)

4.      Businesses with less than 50 employees will have their applications processed first, with applications for funding larger businesses only being approved once the full 50% has been allocated to those businesses with less than 50 employees.

5.      Any remaining funding that exists after these disbursements will be allocated to those businesses with less than 50 employees.

6.      No entity with any ownership association to any business with more than 250 employees may be given funding.

7.      Every lender which takes part in the Paycheck Protection Program must make every effort to process and disburse all loan applications within 14 days of application receipt. Those lenders which are found to be routinely in failure of this standard shall have their processing fees reduced by 50% at a minimum.

This plan will ensure that the small business owners who need this money most—the smallest of small business owners—will get the funding they deserve. These small businesses are the heart and soul of every village, town, and city in this nation. What will our country become if we fail them?

Please back our proposal and help genuine small business owners.

Duncan and Rita MacDonald-Korth, Small business owners and founders of COVID Loan Tracker