
Bank of America: 58,000 small businesses ask for $6B in loans since 9 a.m - cmurf
https://www.cnbc.com/2020/04/03/bank-of-americas-small-business-loan-portal-is-up-making-it-the-first-bank-to-accept-applications.html
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chrisco255
I don't think people appreciate how many businesses literally go into a death
cycle the minute that cash flow is cut by any significant percentage. With
this shut down, it's like, 90+% of revenue cut off for entire industries. This
is going to trigger a series of defaults and bankruptcies that are
incalculable. These SBA loans are a bandaid. They won't prevent massive
bankruptcies and economic depression if these shut downs continue for any
longer.

~~~
aaomidi
I like how when this happens to companies it's not their fault, but when it
happens to people everyone starts berating them for not saving/etc.

Like. What?

Our economic system is beyond broken if we expect companies to have less
fiscal sensibilities than individuals.

~~~
mrfusion
That’s a clever folksy outlook but the real world doesn’t work like that.
Businesses take inputs and produce outputs. They’re not in the business of
having 6 months of savings.

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aaomidi
Then I guess we shouldn't be in the business of bailing them out.

The only way a bailout is acceptable is if we transfer the ownership of the
businesses to the workers who actually produce the value.

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brink
A little off topic. I find it really weird that journalists have tried to
paint this recession in light of other recessions. It feels like apples and
oranges trying to compare the two. We've effectively shut the economy off, yet
people still act surprised when 6M apply for unemployment. It feels a bit like
putting cake batter in an oven and being surprised that you pull out a cake 45
minutes later.

~~~
yodsanklai
I must be very naive, but I also don't understand why general lockdown has to
have negative consequences. Couldn't we stop most non essential activities for
a few months, feed everyone in the meantime (thanks to the work of essential
workers), and just start again exactly like it was before the shutdown?

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ss2003
Lots of industries will not be the same for many years. For example people
will not be going back to restaurants like they did. Their habits have changed
and many people's attitude to being out with large groups of people is going
to be changed forever. Same with tourism.

Many workers will drift into different jobs and for other reasons not return
to their former employers. All of their institutional knowledge is gone.
Supply lines are broken and will not all turn back on at the same time. Many
businesses will not recover from that.

Plenty of economic activity will not be covered by the bailouts and those
parts of the economy are now dead forever.

~~~
runawaybottle
All these things will be back to normal by next summer. But as far as this
year goes, it’s a wrap.

We’ll be lucky if people goto NYC for the holidays this year, visit
Rockefeller Center and the tree, Broadway, etc. The biggest tourist spot in
the nation is also the epicenter of the virus now.

~~~
_trampeltier
No, clothing stores already had a difficult time recently. Now most clothing
store just won't ever open again. What will they sale next fall. The spring
clothes they just bought now?

I guess the same is true for most other shops too.

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Jommi
Why wont they open again? People will still need clothes. Im not sure what has
changed?

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Meekro
The article describes this as a lending program, which is misleading. The SBA
Paycheck Protection Program straight-up gives _free money_ to cover small
business (less than 500 employees) payroll for 2 months. All the business has
to do is not fire anyone in the meantime.

"SBA will forgive loans if all employees are kept on the payroll for eight
weeks and the money is used for payroll, rent, mortgage interest, or
utilities." [1]

[1] [https://www.sba.gov/funding-programs/loans/coronavirus-
relie...](https://www.sba.gov/funding-programs/loans/coronavirus-relief-
options/paycheck-protection-program-ppp)

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blairanderson
The main benefit of these loans is to prevent people from going on
unemployment.

Which is easier:

\- process 300,000 SBA loans with bank employees and get 25% - 50% back

\- process 30,000,000 unemployment insurance filings with state agency
employees and get back nothing

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skizm
This whole ordeal has been pretty enlightening. One of the reasons I have
failed to jump into something of my own (consulting, start a business, etc.)
is because I am constantly thinking about how to survive the worst case
scenario, and I can't come up with a fallback plan I'm happy with. It turns
out the vast majority of people who have made the leap don't think about this
at all, they just go. Not sure if this will change my behavior going forward,
just an observation.

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mgkimsal
With a scenario this immense, I'm not sure you're all that much more protected
in a 9-5 'job' vs being a self-employed consultant. I do agree that many folks
jump ahead without too much planning for the future, and... sometimes it works
out, sometimes it doesn't. I've been burned a few times in the past, and while
I am still self-employed, I've become a lot more cautious and reserved in my
operations and personal life.

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vkou
With this kind of scenario, if you have a 9-5 job, you have a very clear
transition to unemployment. If you're a consultant... There is definitely
government will and intent to help you, but you're a square peg, and the
unemployment offices are still figuring out how to best fit you into a round
hole.

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jason_zig
The banks are doing everything they can to make it a challenge to file for
this program. You can't really blame them since it doesn't make sense for them
to be lending given that 4/5 of the amount is likely to be forgiven. This
should be done through spa.gov or some other government service.

For BOA you're required to have a lending product in addition to a checking
account. While Chase first delayed their roll out and now are only offering a
call back (with no details as to when or what they will require). I hear
similar things about the disaster loans offered by the Government (not hearing
back within 3 days) but at least in that case you can actually file an
application. What are you supposed to do if you don't have an account with BOA
or Chase? You're at the mercy of whether or not the bank wants your loan on
their books. I can't see the upside in doing this through the banks other than
to make it a logistical nightmare for small businesses - if anyone has
thoughts otherwise I would really like to understand.

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mNovak
I think the logic is that banks can much more rapidly deploy money than can
the government (see estimates on the regular stimulus check timeline).

The issue for the banks isn't that the loans will be forgiven, that's fine,
they still get an origination fee; the issue is they're liable for validating
the info you provide on the application, whereby if there's an issue your loan
may in fact not get forgiven, and they're stuck with it.

So you're exactly right, if you already have accounts with the right banks,
it's easy enough for them to verify and process the loan. But if you're an
outsider, it's much harder.

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rdtwo
So what would happen if instead of loan forgiveness the US government decided
that for all existing contracts it is currently March 31st and will continue
to be March 31st for the next 60 days. At that point a lot of things stop
Getting but I would assume a lot of things break as well. The closest thing
out there to just stopping time.

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broth
Title of news article has since been changed to: "Bank of America says 85,000
small businesses have asked for $22.2 billion in loans since 9 a.m."

~~~
boneitis
I particularly like how the article, given its length, was published at 9.15
AM.

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tcas
BoA seems to be only letting people with some sort of loan product with them
apply.

> “We have to focus on the borrowing clients to make sure we can take care of
> them,” he said.

This sounds like Bank of America is trying to help their clients that are at a
default risk to themselves first, which is a bailout for themselves rather
than small businesses at large.

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MR4D
BofA sucks. They won’t give you a COVID-19 SBA loan unless you already have a
loan in place with them before February 15th.

I’ll remember that the next time they need my money to bail them out....which
will probably be this summer.

Selfish effing management.

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duxup
The loans are first come first serve.

I belive a lot of folks are simply asking in case they need them.

That doesn't make the need any less massive, I'm just not sure what it is.

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OrgNet
Who doesnt want free money?

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Der_Einzige
Yet you wouldn't know it based on the stock market. Apperently all of this is
"priced in"

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bequanna
The prevailing belief is still that this will only be a several week ‘pause’
on an otherwise strong economy. Most seem to expect a V-shaped recovery.

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jdhn
This is why I'm still putting money into my investing accounts, but not buying
anything. If it's anything other than a V shaped recovery, stocks are going to
be hammered, and there'll be even more buying opportunities than there are
now.

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bequanna
Certainly not a bad time to have some cash.

