
JPMorgan’s small business loans instead went to its biggest customers - JumpCrisscross
https://www.bloomberg.com/news/articles/2020-04-22/jpmorgan-commercial-clients-beat-out-smaller-ones-for-sba-loans
======
ajsharp
"Banks earned origination fees of 5% on loans of up to $350,000; 3% on loans
between $350,000 and $2 million; and 1% on loans between $2 million and $10
million. That means they earned $17,500 for processing a $350,000 loan,
compared with $100,000 for a $10 million loan."

This seems ludicrously high for what is effectively clerical work -- checking
some boxes, ensuring a company meets various criteria -- and money
distribution. I get that smaller orgs are likely harder to check out (less
income history, poorer quality financial records), but is the $350,000th
dollar really 200 basis points more effort for a bank than the $350,001st?

It's not as if they're being compensated for risk-taking. It's not on the bank
balance sheet; this is government money. They're getting 5% just for doling it
out. Unreal.

~~~
Mandatum
This is MasterCard and VISA processing fees at scale. When you own the
highways, you set the toll.

Don't like it?

Vote for someone who wants to change it.

~~~
ajsharp
1\. No it isn't. Credit card fees are far lower than this.
[https://www08.wellsfargomedia.com/assets/pdf/small-
business/...](https://www08.wellsfargomedia.com/assets/pdf/small-
business/merchant/merchant-passthrough-fees.pdf) 2\. The "don't like it / go
vote" argument is lazy, and again, really doesn't apply here.

~~~
labawi
I presume you quoted a part of the end-to-end fees. A random link[1] suggests
about 3% effective rate for USA. I think in EU fees are legislatively capped
at 2% or so.

> In general, merchant processors will likely offer you an effective rate
> somewhere between 2.9% to 3.3%. You can try to negotiate that down,
> especially if you have high sales volume.

[1] [https://fitsmallbusiness.com/credit-card-processing-
fees-2/](https://fitsmallbusiness.com/credit-card-processing-fees-2/)

~~~
ajsharp
Yes, effective processing fees are consistently around 2.9%. The previous
comment was basically saying, "hey! whaddya expect! credit card companies do
it, so why not!?"

My point is that, actually, no, they don't really. The visa+MC per transaction
fees are actually quite low, unless I'm reading that wrong.

Again, this is a _complete_ sidebar to the actual point, which is that banks
are just rent-seeking because they can on these loans.

------
ethagknight
This article, and the whole PPP program, showcases how local banks and even
smaller regional banks and credit unions are so much better for many
businesses than the bigs. I'm in Memphis, and it seems like everyone around me
was approved, because we have a plethora of small banks and a very limited
footprint of the Chase, Wells, BofA, USB, etc. It has become very apparent
that a trusted banking relationship is worth its weight in gold when you need
it most. Walking into a Wells Fargo branch and waiting in line to talk to a
glorified customer service rep puts you at the back of the national PPP line.
Any issues or incomplete data? Good luck. Walking into Small Town Bank and the
CFO is as a few doors down the hall, they are equipped and prepared to serve.
If you have issues, then you get a call from the someone at the top to work it
out.

Separately, its also important to point out that the same preferential
treatment occurs with the small banks, its just the range of preferences is
lower. Very small businesses with bad credit or those of limited value to the
bank as a client probably get sent to the back of the line, further
compounded, as noted below, that very small businesses' "book keeping" may be
wishful thinking at best. (im not opposed to funds being withheld from
businesses with poor records, its just going to be the reality of a lot of
those old mom and pop shops.

Yet another rabbit hole- cash heavy businesses that skirt the taxman with off-
the-books pay, namely restaurants and bars, are reaping what they've sown.

------
Loughla
This might not add that much to the conversation, but the only thing I can
think to say here is;

Of course.

The large institutions are more savvy, have staff they can devote to finding
this money, and have more connections to the banks.

The small businesses who actually need this money are run by the owner, and
may have an accountant, but certainly don't have someone who can jump through
the arbitrary hoops put in place by banks.

Also,

>More than 300,000 customers [. . .] applied for loans through the Paycheck
Protection Program[. . .]. About 18,000 were funded, for a 6% success rate.

Are you fucking kidding with this? I feel actually insulted by this number.

And finally:

>The bank is among four lenders now facing accusations in a lawsuit that they
prioritized the biggest loans in order to earn higher fees.

Of course. I am upset at myself for hoping anyone in this process would act
like a decent human being. I don't know what to do with the anger I'm feeling.
Any thoughts on where this energy should go?

~~~
inerte
Run for elections or get a job in government.

There are 90 thousand government agencies. Local, city, county, state, etc...
There are people out there who wants you to think they are all like the DMV or
dysfunctional like the Senate and Congress.

Or worse, that the private sector somehow is where the challenge is. Maybe
where you can get richer, but look at the department of agriculture or any
other major government institution. $150b in budget and 100k employees. You
find me a private company with similar size and a mission to feed 380M people.

The US needs a renaissance of the importance and virtue of public service. Our
best minds are selling ads or consulting to shave off 0.001% of sub-prime
derivatives in nanoseconds.

The government is us, and it’s huge and slow and careful and conservative and
complex. But it needs us inside to change.

PS: I got inspired by words from Anand Giridharadas, so bonus points if you
recognized any from his interviews.

~~~
chosenbreed37
> Or worse, that the private sector somehow is where the challenge is. Maybe
> where you can get richer, but look at the department of agriculture or any
> other major government institution. $150b in budget and 100k employees. You
> find me a private company with similar size and a mission to feed 380M
> people.

I'm off on a tangent here...but is it really the responsibility of the
department of agriculture to feed 380 million people? What did people do
before the creation of the department of agriculture? :-)

~~~
save_ferris
> but is it really the responsibility of the department of agriculture to feed
> 380 million people?

Given that the primary goal of farming is to feed people, why not? USDA was
created by President Lincoln and was critical to ensuring food distribution
throughout the Great Depression. Which agency is better equipped to handle
this responsibility than Ag?

------
tempsy
It’s such a dumb narrative to blame banks and individual businesses for this
when the Treasury was the one that launched a poorly designed and ambiguous
program that was open to interpretation and was clearly underfunded to begin
with.

For example, a restaurant chain with less 500 workers per location qualified
as a small business. Is there any restaurant in the world that has 500 workers
in one location? Even if there was would that be “bigger” than a chain with,
say, 50 locations with 50 employees each?

It is strange to expect a business to anticipate that the funds would run out
and factor that in to determining whether it would be “fair” to apply if you
qualified.

~~~
MivLives
While it's definitely a ridiculous bar, one the things that shocked me about
working at a grocery store is how many employees worked there. I think there
were around 300-400 depending on the time of year. This wasn't even that
massive a store.

Not saying that restaurants have that many, just that it can be deceptive how
many employees a store has.

~~~
coldcode
Each Chili's if I remember correctly has about 150 people total. Pei Wei's
tend to be around 50 or so. Those are the only two I vaguely recall being told
by someone.

------
Digory
At the shotgun start, BoA’s position was that priority would go to clients
with BoA loans, not just deposits.

In other words, they were focused on transferring their slop loans to the
government.

They relented after a couple of days, but of course, small depository
customers had already been handicapped.

~~~
lozaning
An old college buddy is a CPA, his advisory to all his clients applying for
this program was to draw down their _entire_ existing revolver, and then
submit their application to the bank. Last I'd talked to him he had 100%
success rate.

------
ypzhang2
These two articles are somewhat related and illuminating:

[https://www.bloomberg.com/opinion/articles/2020-04-20/there-...](https://www.bloomberg.com/opinion/articles/2020-04-20/there-
s-nowhere-to-put-the-oil)

[https://www.bloomberg.com/news/articles/2020-04-17/giant-
u-s...](https://www.bloomberg.com/news/articles/2020-04-17/giant-u-s-lenders-
outpaced-by-rivals-in-small-business-rescue?sref=1kJVNqnU)

Long story short, part of the issue is that big banks have large complex
regulatory and compliance schemes as a result of 2008. They are then unable to
process SBA apps because of the low amount of government guidance, so smaller
banks with smaller compliance teams were able to process more. This would also
mean that smaller businesses would probably have a hard time getting all of
their paperwork right vs bigger companies with dedicated legal and accounting
teams. Also, banks will then prioritize existing customers, especially ones
with loans, because most of the KYC and due diligence has been done already.

Part of the answer is that as an unintended consequence of previous compliance
corrections, larger banks are just more unwilling to make loans under unclear
guide lines, which obviously there will be if the government rolls out a
program in a 1-2 weeks.

------
CPLX
I just don't get the way this narrative is washing over the entire PPP program
and most of the posts here don't match my personal, direct first hand
experience.

The program has been a bit of a mess, but it seems to be broadly functioning
as intended, aside from the running out of money part.

I was involved in two business applications, both for very modest sums of
money, five figures in both cases, and while it was a little stressful and so
on with all the news, and difficulty getting updates from the banks, both were
successful and it was not particularly complicated to do.

One loan came from a giant top 5 bank, one from a niche bank, and in neither
case was there any special access or connections of any kind. Just regular old
open up a small business account by walking into a branch stuff, and applying
as an absolute nobody.

So it was possible.

And this whole thing about the chain restaurants, while a little frustrating
maybe, is still something squarely within the lines of the law as written. The
law was supposed to support paychecks, not companies, and it's pretty obvious
restaurant workers are heavily affected. Maybe they shouldn't have modified
the chain rules, but they did.

I agree there probably should have been a restriction on larger companies,
like publicly traded ones, but somehow this idea has taken over that this is
where all the money went. They wrote over a million loans, and as far as I can
tell from actual data driven journalism the vast majority of them went to
businesses that basically fit into the goals of the program.

Yet, everyone's talking about Shake Shack for some reason.

I feel like this is just another brand of the usual idiocy around means
testing in public policy, which inevitably just adds complexity and drags the
whole system down.

The PPP program strikes me as one of the most useful parts of all the bailout
efforts and it should be praised and expanded for the most part. If you're mad
about big business focus on what the Fed is doing with junk bonds and private
equity debt. That shit is where the fucking crime is going on.

~~~
dannyw
74% of PPP loans went to big businesses. 7 4 %. For a program designed for
small businesses, it's not okay. It's complete and total failure, and not a
single dollar should be funded without fixing the systematic problems.

Imagine if the government lost 74c of every $1 paid in Medicare to billing
fraud? Would that be a good program?

Source: [https://www.washingtonpost.com/business/2020/04/20/white-
hou...](https://www.washingtonpost.com/business/2020/04/20/white-house-gop-
face-heat-after-hotel-restaurant-chains-helped-run-small-business-program-
dry/)

~~~
CPLX
First of all you're just misquoting the article, it says 74% of the loans went
to _small businesses_ and here's the quote:

"The vast majority of these loans — 74 percent of them — were for under
$150,000"

But whatever the figure the analogy is still nonsensical. The program was
designed for the companies it was designed for. The plain language letter of
the law explains who was supposed to get it.

The better analogy for what you're saying was "Imagine if the government send
26 cents of every $1 to people that were plainly eligible for Medicare, but
who I don't think should have been" which is another thing entirely. There's
no allegations of fraud here.

And as someone with direct first hand experience of being involved with _tiny_
businesses for whom this program was an utter lifesaver, I start out naturally
skeptical of this narrative.

The problem with the program has been that it wasn't funded enough. And that
it was a mess at first and banks were bad a communication about it.

But frankly I think we should be expanding and extending the program, not
pretending it's something that it plainly is not.

------
tareqak
[https://www.sba.gov/funding-programs/loans/coronavirus-
relie...](https://www.sba.gov/funding-programs/loans/coronavirus-relief-
options/paycheck-protection-program-ppp) has a section for “Who Can Apply”,
which I’ll quote below:

Who Can Apply

The following entities affected by Coronavirus (COVID-19) may be eligible:

* Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)

* Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:

\- 500 employees, or

\- That meets the SBA industry size standard if more than 500

* Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

* Sole proprietors, independent contractors, and self-employed persons

------
brianbreslin
The other rationale is, it takes as much time for JPMorgan to process a $10M
loan vs a $10k loan since its mostly automated. If they are making a % on it,
and know there is both a limited amount of funds and contracts that can get
pushed through, OF COURSE you're going to prioritize your already best
customers.

My business for now banks with BB&T (now Truist), and we were never even given
a form to apply through, as they were releasing it in waves. I ended up
applying via PayPal but it was already too late. BBT issued $10B in loans, but
they don't say to how many, just that over 100k people tried to request them
in first 48 hours. I'll be moving my banking away from this regional bank
after this.

~~~
koheripbal
The limit is 500 employees with a 100K annual salary cap per employee, at 2.5
months.

So $10.4MM is actually the maximum loan you can get - and the vast majority
are far less than that.

------
MattGaiser
For those who don't have a Bloomberg account.
[https://outline.com/HacVTV](https://outline.com/HacVTV)

------
Cymen
Not only that but if you had an application in progress, they now have this
text when you return to try to complete it (they shut it down shortly after
sending out the email to complete applications):

Last Updated: April 22, 2020 10:30 a.m. ET

Message from Jennifer Roberts, CEO of Chase Business Banking It appears
Congress will approve additional funding for the Paycheck Protection Program,
which is encouraging news for thousands more of our small businesses.

We’ll begin submitting applications as soon as the SBA gives the green light.
We never stopped working our large application queue because we know how
important this money is for your business.

We’ve decided not to take any new applications now. We’ll keep monitoring the
funding availability and may consider taking new applicants in the future.

I wish we could help every business through this program, but funds could run
out again quickly and we have preexisting applications in our queue. We will
continue to process and submit applications until funds are exhausted.

Sincerely, Jennifer Roberts

~~~
koheripbal
It's hard to imagine that any small business has not submitted their
application at this point.

I mean, our business was literally refreshing the page every 30 minutes last
weekend for the application to go live, and I have to imagine that every
business that needed the money was doing the same thing.

------
tathougies
That's good. Chase followed the law exactly and gave preference to those who
applied first. I would really rather not having banks decide who to give loans
to based on their feel-feels instead of a simple first come-first served +
application of government set criteria.

Any blame for who received the loans and who did not falls solely and
absolutely on Congress, which has absconded all responsibility by going out of
session.

------
mikhailfranco
The Cantillon Effect says:

    
    
      When money is printed
      those who get it first 
      acquire hard assets 
      hence bid-up asset prices 
      and so capture most real value.
    

However, this elides an obvious _a priori_ Cantillon Corollary:

    
    
      When money is printed
      those closest to the trough 
      get most of the cash.

------
ineptwriter
Hmmm... I'm also curious why JPMorgan Chase only had 4% of the rescue program
($14B out of $349B) when they have 9-10% of the commercial banking market
share (IBIS World). Maybe they don't serve small businesses as much as other
banks? Or did some other banks get a disproportionately large % of the total?

~~~
mikekij
Could be that the $10M cap means that the share of their biggest customers'
PPP loans were a smaller percentage of their customers' bank deposits.

------
kerkeslager
Obviously.

This the obvious result of letting banks be the middle-men to every attempt at
helping people, and refusing to regulate companies because that would "stifle
innovation".

"Innovation" in a bank usually means finding a new way to suck more money out
of other sectors while staying just far enough on the right side of the law
that the profits outpace the fines. The financial services we need, for the
most part, already exist.

You think people were clamoring for "overdraft protection" that doesn't tell
them they've overdrawn their account, gives them the money, and then charges
them $35? FSAs where any unused funds are kept by the bank and/or your
employer? Housing loans that the bank knows you can't pay off, so the bank
gets to take your house _and_ get a government bailout? Would that we should
stifle such innovation.

------
coleca
If you're self employed and are looking for some really good info, check out
the site that bench.co put together:

[https://bench.co/blog/operations/paycheck-protection-
program...](https://bench.co/blog/operations/paycheck-protection-program-self-
employed/)

I have no affiliation with them, just think they have a great collection of
articles on the PPP, EIDL and the other SBA COVID programs. There's so much
SPAM content out there it's tough to tell what is legit and what is not.

The SBA.gov site has limited information on the programs, there are more
criteria that the lenders are applying to make sure they are covered. Many
people would not have realized that they were eligible for the programs based
on the news stories and government sites.

------
chadash
With a $2 trillion bailout, it's inevitable that some of the money gets
misdirected. Even with the best oversight (and Trump fired the person in
charge of oversight), at this scale, significant amounts of money will be mis-
allocated and needless to say, the press will report on it, which will make it
more difficult to do future bailouts, even if they are necessary.

I wonder if we would have been better off just sending every American a check
and calling it a day. Rather than supporting companies who indirectly support
workers, you just support workers directly (sure... make a few case-by-case
exceptions for "cannot fail" businesses).

~~~
pbhjpbhj
Which businesses cannot fail?

Services, sure, you need a water supply (say). But if the water business fails
then someone will snap up the assets, maybe the state, and the service won't
fail. So? Pension companies and banks that the C-suite stole from??

~~~
MattGaiser
If you let the airlines fail, the reincarnations are going all be like
SouthWest. Say goodbye to air service to smaller cities. Those routes can only
exist at reasonable prices because of the large networks of existing airlines.

If you let a manufacturing company fail, someone will buy the contracts from
them. Will they buy the plant with its union workers and environmental
liabilities? Probably not.

So a lot of it is less that they cannot fail, but there are major societal
downsides to letting it happen.

~~~
burrows
> If you let a manufacturing company fail, someone will buy the contracts from
> them. Will they buy the plant with its union workers and environmental
> liabilities? Probably not.

So we're just subsidizing loser industries forever?

------
julianozen
Please EILI5. Since these are loans - these companies are not receiving free
money - and since these companies represents several millions of jobs, isn’t
it kind of ok that these companies have taken the loans to keep their all
those employees on payroll instead of suspending pay?

If there is something I’m missing or not taking into consideration, please let
me know. Thanks

~~~
Traster
Well, firstly, these aren't loans in the traditional sense. The Paycheck
protection programme (which is what this funding was) was a scheme where you
could borrow money from the government and as long as you use 75% of the money
for payroll, and don't lay off any staff for 8 weeks, then the loan is
forgiven and you don't have to pay it back.

So the point is that it's actually not a loan, for the people who got the
money, it's almost certainly just free money. Which is why people are outraged
that the money overwhelmingly went to the well-connected large businesses who
had the most resources to weather the storm, and the money ran out for real
small businesses.

~~~
user5994461
On the bright side, if it is true that they can't layoff anybody for the next
8 weeks and there is no loophole. This could save the economy from incredibly
large rounds of layoofs, remember that large companies each employ many
people. This could dramatically help to stabilize the economy if the lock down
is relaxed before the 8 weeks term.

------
lymeeducator
Are donations above $5 dollars even required to provide a meaningful campaign
for any position in government? Or, are "donations" legal because politicians
and the system want the payoff? Dedicate resources for open source platforms
that enable transparent governance and increase constituent involvement.

------
pdonis
What I want to know is, what about large corporations that do franchising?

For example, many if not most restaurant chains are franchises. The Potbelly
location near you isn't owned by the Potbelly corporation; it's a small
business that has a franchise agreement with Potbelly corporation.

If Potbelly corporation, as a large corporation, got one of these loans, and
then used the money to help their franchises, who have a much better chance of
getting the help through their large corporate partner than as individual
small businesses applying for these loans, I would not have a problem with
that. And for all we know from this article (or, for that matter, from any
other reporting on this issue that I have seen), that could be happening with
the money the large corporations are getting.

Or, OTOH, if all these large corporations that do franchising are getting
these loans, and then are _not_ using the money to help their franchises, I
would have even more of a problem with that than I would with large
corporations that don't do franchising taking the money.

But from all the reporting I've seen on this issue, I don't know which it is--
there could be no problem at all, or an even worse problem than the reporters
are alleging. But the news organizations are all so stuck on pushing a "big
corporations bad" narrative (which, given that they are themselves big
corporations, takes a lot of chutzpah to begin with) that they can't even be
bothered to ask the obvious follow-up questions that would help to figure out
whether there actually _is_ a problem, and if so, how bad it is.

And news organizations wonder why the public doesn't listen to them any more.

------
drawkbox
Anytime needed stimulus goes through banks, don't be surprised if it never
makes it out of said bank or to the intended locations as they are self-
preservation first as expected.

Banks should help the river and get access to the flow, they shouldn't be a
dam that holds back the flow, filtering only for their customers or large
companies masquerading as "small business".

Had policy sent the money directly to companies from the SBA/IRS, customers
then would choose the banks to service that guaranteed government grant/loan
essentially. Much like the FAFSA system for student loans, you get your
amount, then a servicer handles the actual loan but there is literally no risk
to them as it is guaranteed.

Why we sent guaranteed money to be held up in banks and did information and
credit checks, on already known information from the IRS, well we know why, to
pilfer it.

Had they ran it a better way, using the actual market, directly to
businesses/individuals, that is lots of money out there for banks to go get
and the market knows it is out there as well.

Instead, it was a direct transfer from the Fed and treasury to QE that was
pilfered by the usual suspects: hedge funds, market makers, foreign funds,
oligarchs, wealth/value extraction ops, naked short selling, short and distort
and more. The SBA money was pilfered by banks and large companies. The
'stimulus' for the economy, routed around the entire actual economy, never
reaching individuals or true small business.

Companies that received SBA funding many are listed on the public markets. I
doubt most people would call "small business" companies that have IPOed and
been on the market for years. These companies have other access to funds, they
just wanted the 1% loans and took from hundreds and thousands of small
businesses that supply them, subscribe to their services, buy their software,
consume their products, feed them and other services.

Examples of companies that got SBA PPP and other [1]:

\- Drive Shack Inc. (DS) $5,276,742 - Golf company like TopGolf... wow. That
would have funded many, many small businesses.

\- New Age Beverages Corp. (NBEV) $6,868,400 - Revenues 250~ million...

Isn't it safe to say if you have a stock ticker and one of 3812~ companies on
the public markets that you aren't "small business"?

 _How to fix it..._

We need a micro small business emergency stimulus.

\- Less than 50 employees across ALL locations, less than 2-3 million revenues
and sole proprietors.

\- There can be no gaps to allow this to go to the already serviced.

\- Include sole proprietors and really small companies (< 10 employees) with
priority that matches their numbers in the market.

The current "small business" designation is really small to medium to large
businesses. However, sole proprietors are 73% of all small business.

America is mostly small businesses.

SBA/Chamber of Commerce has 30.2 million for companies under 500 people. [2]

Lots are sole proprietors or very small companies with < 5 people.

22 million of the small businesses in the United States are individually
operated, meaning that they have no other employees other than the owner.

99.9% of businesses in the United States are small businesses, owing to the
rather large threshold of 500 employees, or fewer.

Small business is the engine of America.

Small businesses comprise what share of the U.S. economy?

Small businesses make up [3]:

\- 99.7 percent of U.S. employer firms,

\- 64 percent of net new private-sector jobs,

\- 49.2 percent of private-sector employment,

\- 42.9 percent of private-sector payroll,

\- 46 percent of private-sector output,

\- 43 percent of high-tech employment,

\- 98 percent of firms exporting goods,

\- 33 percent of exporting value.

It is time to help the lower/middle, sole-proprietors and small business or
America as we know it is much much different after this.

About 8 trillion in 'stimulus' and QE, at a cost of 20k to every citizen, for
that individuals got $1200 many haven't got yet and small businesses finding
out how small of fish they a really are.

The banks helped the big fish, but the big fish need the small fish to
survive.

 _Money trickles up and down and all around, but money only trickles where
other money is found._

This market is broken for lower/middle and people or small business. It is
gangbusters for wealth and value extraction ops. How long can this go on?

The stimulus for individuals, families and small business is vaporware, time
for some vaporwave as we fade away into the ether.

Good luck wealth and big business with no one to skim from and no small
business to use as research and development or suppliers.

[1] [https://www.wsj.com/articles/these-are-the-public-
companies-...](https://www.wsj.com/articles/these-are-the-public-companies-
that-got-small-business-loans-11587493742)

[2] [https://www.chamberofcommerce.org/small-business-
statistics/](https://www.chamberofcommerce.org/small-business-statistics/)

[3]
[https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf](https://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf)
Source: U.S. Census Bureau, SUSB, CPS; International Trade Administration;
Bureau of Labor Statistics, BED; Advocacy-funded research, Small Business GDP:
Update 2002- 2010, www.sba.gov/advocacy/7540/42371.

~~~
Aunche
It most likely takes about as much time for bank to process a bailout for a
larger company than a smaller company. At least 75% of the SBA money should be
going to individuals through payroll anyways, so why wouldn't you want to
serve larger companies first?

~~~
drawkbox
Larger companies weren't supposed to be the target of the "small business"
loans/grants.

$500 billion was set up for corporate bailouts.

$350 billion for small business.

Large companies took both.

America is mostly small business, money should have gone directly to them via
SBA/IRS and then they get to pick the bank to service it like the FAFSA
student loan system. There should never have been banks needing to process
these, all the information is already known. It was a filter to make sure big
business got it.

Many larger companies just wanted the 1% loan that has to be paid back in 2
years. They have access to other funding and have more assets for leverage in
those dealings. Small businesses, true small business now, do not have that
access to capital.

The PPP for instance 75% needed to go to payroll, so larger companies free up
other money, and use the PPP for payroll while continuing to roll. 25% can be
used for non payroll but other needed expenses. It was a sham.

The rules also hit small business harder on payback, the amount that turns
into a grant is based on retained employees, so with a smaller headcount, less
people leaving causes a bigger hit for small business. It should have had a
revenue component to that.

Fact: companies on the public markets are not "small business", zero would be
classified that way in any other metric.

If you truly think most of the money is going to go to individuals in the end
I have a 'bailout' to sell you.

~~~
Aunche
> Larger companies weren't supposed to be the target of the "small business"
> loans/grants.

That was what explicitly written in the bill, so you'd have to blame Congress,
if anyone. It's not like TopGolf is big enough to buy out politicians.

> money should have gone directly to them via SBA/IRS

The SBA had 3293 employees in 2015. They don't have the capacity to process
all the applications either.

> The PPP for instance 75% needed to go to payroll, so larger companies free
> up other money

These companies are shut down at the moment. They don't have other money. If
they did, I'm interested to see proof that they're just messing with
accounting.

~~~
drawkbox
> _That was what explicitly written in the bill, so you 'd have to blame
> Congress, if anyone. It's not like TopGolf is big enough to buy out
> politicians._

America for some reason now trusts politicians and bankers, it isn't working
out.

We need to go back to not showing our cards on politics, who you vote for used
to be secret and in invasion of privacy to know. Why do people put themselves
in tribes and lose out on leverage? I can't tell you, it makes no sense.

I'd like us to go back to not saying who you vote for, being tough on bankers
and politicians, and carry a big FDR/Teddy Roosevelt anti-trust sword to chop
them down.

The market/economy is a garden, the struggling plants need help and the
overgrowth needs to be harvested and trimmed back.

> _The SBA had 3293 employees in 2015. They don 't have the capacity to
> process all the applications either._

You glossed over the IRS which has the data on what people/companies pay. They
know more than the banks.

IRS is used in FAFSA and it works great for getting student loans approved,
then you select the servicer. Same should have happened here for the
banks/small business. Once approved you go select your bank (servicer) that
gets fess on free guaranteed money for the bank.

There are 30 million small businesses, 22 sole proprietors, and most are < 10
employees. There was nothing for these people, zero leverage, zero help. They
make up 99% of America. America truly is a small business long tail.

> _These companies are shut down at the moment. They don 't have other money.
> If they did, I'm interested to see proof that they're just messing with
> accounting._

The point is they used this for a cheaper loan. They had access to other
capital and assets for leverage, small businesses do not.

The companies that are on the public markets, many of them are, have direct
access to more capital.

------
tomohawk
If Congress creates a bad law, how is JP Morgan to blame for following it?

Let's say they say, "there must be some mistake here - let's use our own
authority to do what we think is right". Would that not just expose them to
lawsuits and other issues?

------
munk-a
Just to note - the CEO of this company (Jamie Dimon) is currently a top pick
for Biden's treasury secretary[1]. If this concerns you please do reach out to
the campaign via social media or any means you feel appropriate to make clear
your opinion. I, personally, don't want change to be upgrading from a really
slimey banker (Steve Mnuchin) to a slightly less slimey banker.

1\. [https://www.axios.com/joe-biden-cabinet-vice-president-
picks...](https://www.axios.com/joe-biden-cabinet-vice-president-
picks-b17882ac-3953-450f-8afb-38a3c8dcda57.html)

------
neonate
[https://archive.md/8pkMd](https://archive.md/8pkMd)

------
thewileyone
Financial giants going to screw us all over, again? Who is really surprised
here?

------
Ididntdothis
It seems to work like this with most programs that aim to help the little guy:
the big guys will take their share. It always happens with tax cuts and it was
to be expected with the coronavirus relief. And without doing that any bill
will be lobbied to death.

~~~
toyg
_> It always happens with tax cuts_

You misunderstand. Tax cuts are not something built to help the little guy
which just happens to be abused by the big guy too; they are gravy for the big
guy that is justified by throwing a bone to the small guy too.

------
chadlavi
surpriiiiiiiiise

------
HashThis
A percentage of Wall Street firms are crony capitalism based theft. What
percent do you think that is?

Here is a case of the banking industry/WallStreet selling out the American
citizens. Congress won't hold them accountable, because congress sells out
American citizens.

