Coronavirus hit the United States like no other country. The US has a million positive cases and 61,000 deaths so far, the most by any country in the world. It affected not only the human race but also the business and economy. To revive the economy, the federal government has released an immediate stimulus package of $2.2 trillion for the affected people and another $349 billion for small businesses. The small business lending program is aimed to keep the merchants afloat during and after the pandemic. But the program attracted criticism as it allowed ways to divert funds to public companies, which can raise money from their investors and neglecting the small business merchants who are desperately waiting for cash.
Although the government didn’t identify the entities which received the funding under this program, NBC News in-depth analysis showed funds were diverted from small business merchants. The study from NBC News showed that three companies that have close ties with Trump administration got a whopping amount of $18.3 million under this program. Four firms received loans worth more than $10 million by using their subsidiaries in the loan application process. There seems a pattern in giving out the loans, four other firms received more than $20 million, and all of these companies had a wealthy investor board members in common. The administration for small businesses explained that their initial program benefitted over 1.6 million small businesses across the country, and another $320 billion plan passed by Congress is set to help the rest of the companies.
Amanda Ballantyne, executive director of the Main Street Alliance, which is an advocacy group of small businesses, said - “Even though the program is aimed to help small businesses, the actual implementation has been quite different so far. Presently, this program benefits only those who are well-connected, well-banked businesses.” She further asked the policymakers of the program to prioritize actual small businesses. Democratic Presumptive nominee Joe Biden criticized Trump for neglecting small businesses. Here’s the tweet from Biden:
Wealthy firms with ties to Trump got millions, while countless small businesses were turned away. No wonder he wanted no one to watch how the money was deployed.— Joe Biden (@JoeBiden) April 26, 2020
The American people deserve rigorous oversight — and small businesses deserve relief. Now. https://t.co/UNBLt4g5R9
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