If small businesses were on liquidity fumes and their survival was in jeopardy, this cheap capital would be robustly absorbed and borrowers would worry about forgiveness later. Thus I don’t necessarily see a PPP III due to the unexpectedly lethargic takedown of PPP II.
I saw Dick Durbin advocate on the floor of the Senate to give the recipients of unemployment benefits a raise, incentivizing people to stay home in lieu of working. Nonsensical PPP provisions make it more difficult for employers to restore staffing levels therefore qualify for forgiveness. But I don’t see that materially muting demand.
John M. Barrett
President & Chief Executive Officer
jbarrett@firstcitrus.com
T: 813.926.1314
10824 North Dale Mabry Hwy.
Tampa, Florida 33618
www.firstcitrus.com
Vision: Enhancing vibrancy throughout Tampa Bay by helping families become more financially secure and businesses economically successful.
-----------------------------
CONFIDENTIALITY NOTICE: This e-mail, intended only for the addressee(s), is confidential and may contain certain personal information. Any dissemination or use of this e-mail by anyone other than an intended recipient is strictly prohibited. If you are not a named recipient, you are prohibited from any further viewing of the e-mail or any attachments or from making any use of the e-mail or attachments. If you believe you have received this e-mail in error, please notify the sender immediately and permanently delete the e-mail, any attachments, and all copies thereof from any drives or storage media and destroy any printouts of the e-mail or attachments.
------Original Message------
Treasury Secretary Steve Mnuchin told CBNC on Monday that the Paycheck Protection Program "is working great," but conceded he is open to improving it, including loosening the requirement that borrowers must use 75% of the funds to pay employees if they want to get the loan forgiven. (His PPP-related comments start at the 14 minute mark of a 16 minute interview.) But don't hold your breath waiting for Treasury or the SBA to fix the small-business rescue program. Mnuchin pointedly said he was willing to work with Congress on changes, making it clear he thought responsibility for the program's parameters lies with Congress. But that does not jibe with the SBA Inspector General report criticizing the SBA and Treasury for imposing limits on the Paycheck program that went beyond what Congress required. The Inspector General report attracted a lot of media attention, and American Banker also noted the Inspector General scolded SBA for missing the deadline for defining the terms borrowers must meet to get the loans forgiven. Roughly $120 billion of Round 2 of PPP funding is still available, but some small businesses are afraid to apply due to the fuzzy forgiveness rules.
Do you think a third round of PPP funding will be needed? Is there enough demand? What improvements to the program do you support? How worried are you about fraudulent borrowers taking advantage of PPP? Don't be shy. Share your thoughts! And one final link today for anyone tempted to argue on Twitter. Don't. It's impossible to win as Treasury Secretary Steve Mnuchin discovered courtesy of Guns 'N Roses' Axl Rose.
------------------------------
Barb Rehm
Senior Managing Director
Promontory Interfinancial Network, LLC
Arlington VA
------------------------------