ST Alpha - "$300 million of the $350 billion small business loan program went to 75 publicly traded companies -- (link*)" (Reading a Post)

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$300 million of the $350 billion small business loan program went to 75 publicly traded companies -- (link*)

Posted by znufrii Apr 21 '20, 07:28

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A quarter of whom had previously disclosed they were in trouble before the crisis. (apnews.com)

Responses:

Related (don't be shocked znu!): Looks like banks shuffled the loan process to give these big companies money first so they could collect more fees -- (link) - decline Apr 21, 08:38 7
- Based on what I saw from our bank clients, I think the larger customers had the advantage of personal relationships at the banks. I don't think it - pmb Apr 21, 09:14
- If a big bank processed $10m in loans they should get the same fees regardless of # applicants but they'd sure save man hours processing biggest first -- nm - Max Apr 21, 09:05 5
  - It's an origination fee that pays out the largest amount for loans between $2M and $10M - decline Apr 21, 09:14 4
    - But that's backwards. If the percentage fee was higher for smaller loans they would be incentivized to do more smaller loans. -- nm - pmb Apr 21, 09:15 3
      - I think the assumption in the lawsuit is that the banks figured out it was a finite amount of money that would run out and that their SBA groups -- (edited) - decline Apr 21, 09:23 2
        
        And I'm saying, that based on my experience with the banks it wasn't that they planned to maximize their fees by doing it that way. It just worked - pmb Apr 21, 09:48 1
        
        banks are evil pmb - decline Apr 21, 10:02
I'm fine with some of the public companies getting money - just because they're not profitable or paid a fine doesn't mean they aren't paying workers. -- (edited) - decline Apr 21, 07:42 4
- Yes, though even there, these are in the restaurant businesses that are getting hammered. In order to get the loans they have to keep 90% the - pmb Apr 21, 08:57 3
  - In that sense the money is fungible - a worker at one company is as needy as another - but the application should have asked for cash-on-hand numbers. -- nm - Max Apr 21, 09:00 2
    - There simply isn't time to process on that basis. Banks were doing no diligence. The idea was to get it out as fast as possible. -- nm - pmb Apr 21, 09:09 1
      - Applications required excluding employee earnings above $100k. If they could include that in the calc, they could have included current cash. - Max Apr 21, 10:42
shake shack, when called out on this, agreed to "give the money back", that still makes me laugh. -- nm - tRuMaN Apr 21, 07:31
psst (million) -- nm - decline Apr 21, 07:30 11
- Right. I also saw that 70% of PPP loans were under $150,000. So I don't know that the skew was as bad as it's being made out. -- nm - pmb Apr 21, 08:13 8
  - Well, they ran out of money, for one. -- nm - Spawn Apr 21, 08:22 7
    - Understood, but that definitely was going to happen. A second round is coming. -- nm - pmb Apr 21, 08:30 6
      - Would rather the 86% get half their money now, half in a month so a bunch of smaller fish would not starve. -- nm - Spawn Apr 21, 08:33 5
        
        Who is the 86%? -- nm - pmb Apr 21, 08:46 4
        
        $300M. Yeah, should have said the 75. -- nm - Spawn Apr 21, 09:01 3
        
        Sure, but that's .085% of the total. It's not a massive piece. -- nm - pmb Apr 21, 09:08 2
        
        Now I have znu brain. 300B -- nm - Spawn Apr 21, 09:25 1
        
        I think you need a nap. It was $300 million out of $350 billion. -- nm - pmb Apr 21, 09:45
- Yeah, misread that. Fixed. -- nm - znufrii Apr 21, 07:31 1
  - I was happy when I first read the post. -- nm - Spawn Apr 21, 07:44

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