Congress Allocated $300 Billion For Small Business Loans

38

As part of Trump $2 trillion corona virus relief fund, congress has dedicated $300 billion for small businesses loans. This is to encourage banks to lend money to companies that agree to keep their workers on the payroll.

Small Business Loans Under SBA Program

Congress Allocated 300 Billion For Small Business Loans
Courtesy: Nytimes.com

The loan might be forgiven if the employers retained their workers and did not reduce their wages.  The government would repay lenders for the forgiven portions of the loans. The loan will be given on a first come first serve basis. Though it is called small business loan, but even companies with over 500 employees can also apply.

According to Trump on Monday, thousands of small businesses have applied for more than $40 billion loan. However, business whose one-third of their gross annual revenue came from legal gambling activities are not eligible to apply. In responding to this, The American Gaming Association (AGA) CEO Bill Miller wrote to trump regarding the issue, he wrote;

“The rules rely on antiquated, discriminatory policy that renders small gaming entities ineligible to receive critical loan assistance designed to help small businesses pay their employees”.

According to data from AGA, if US Casinos remain closed up till middle of May, it will cost the country $43.5 billion in economic activity. However, all the 465 casinos in US were shut since MARCH 23.

Miller added;

As it stands, the policy discriminates against these mainstream businesses and, more importantly, the hundreds of thousands of employees who rely on gaming for their livelihood.

Banks are complaining that the loan process is time-consuming as banks have to manually enter borrower’s details into the S.B.A.’s online portal to get approval from the administration regarding the loan.

Likewise, borrowers have to provide detailed information about their financial histories and businesses, and the lenders are getting overwhelmed with the paper work process.