The billionaire investor and entrepreneur sees problems with small businesses having to apply for loans to get coronavirus relief. He says a more efficient approach would be to let them run negative balances on their bank accounts.
A backlog has formed since the first round of Paycheck Protection Program funding dried up, threatening to further strain a platform that struggled to handle the initial workload.
The program, created in response to the 2008 financial crisis, generated $19 billion in small-business loans. It could be used as a viable path out of the coronavirus pandemic.
Small banks are a lifeline for many local businesses and should be given first crack at distributing funds from a continuation of the federal stimulus program.
Bank of America and U.S. Bancorp were also named in a lawsuit filed in Sunday in which the banks are accused of prioritizing large loans distributed through the Paycheck Protection Program in order to maximize fees.
Lawmakers are considering a plan to reserve at least $50 billion in Paycheck Protection Program funds for customers of community banks and small regionals.
From stimulus checks to the Paycheck Protection Program, the government’s infusion of cash into an economy reeling from the coronavirus pandemic has primarily helped those who already strong banking relationships.
