/biz/ - Business & Finance

>>19191209
Yesterday's at least
>>19191283
a word on this topic. I'm in banking, seen the ppp rounds, relationships with businesses blah whatever.
There is significant potential for mh both on the end of unemployed workers but also businesses taking stimulus. These loans are /not/ funded by the institution at all, 100% of the funding comes from SBA, the role of the institution is to use its existing compliance competencies to prepare applications and financial infrastructure for borrowers. So our role is not to determine the amount that is appropriate based on a borrower's risk factors, but to get them the maximum amount the SBA will approve. How the funds are used is fairly tightly controlled... the scheme most banks are using is to open a standard checking for the funding to land in, then eventually they'll need to prove to the government that every tx on that account was a qualified tx. I don't know who is going to audit that, IRS? Banks are supposed to be doing dd to make sure they're not complicit in misappropriation but, you know. It doesn't always happen.
Businesses that got a ppp have been telling us that their employees are actually pissed off about it because of the provision that an employer must rehire their workforce to be forgiven of the debt. Which means people who are on unemployment getting a raise, or treading water without working, will have to come back to work. It's a very perverse set of incentives.
Personally I am a little worried that businesses who took loans may fail to rehire for this reason and that could leave them stuck with the bill. They're at 1%, but still.