Watchdog report: SBA didn't tell private lenders to prioritize rural small businesses for relief loans - Entrepreneur Generations

A new report from the Small Business Administration's Office of the Inspector General said that the agency didn't advise private lenders to prioritize borrowers in underserved and rural markets when implementing federal relief. Because the SBA didn't do that, rural and other underserved businesses may not have gotten much-needed funds from the $669 billion Paycheck Protection Program under the CARES Act.

"The report is the first independent analysis of a key feature of the government’s efforts to deal with the economic fallout from the coronavirus," Aaron Gregg reports for The Washington Post. It buttresses concerns about whether the funds from the $2 trillion CARES Act are being distributed fairly: "Last month, the Treasury Department had to warn well-capitalized, publicly traded businesses that they would probably not be eligible for the program after several national brand names reported receiving tens of millions of dollars in loans under the Paycheck Protection Program, while many small businesses without strong banking relationships struggled to get loans."

The PPP is designed to allow small businesses to stay afloat and keep paying their employees via low-interest loans that can be forgiven if at least 75 percent of the funds are spent on payroll costs, among other measures. But the program relies on the banking industry to administer the program, with the SBA and Treasury functioning mostly as regulators, Gregg reports.

from The Rural Blog https://ift.tt/2Ajof8h Watchdog report: SBA didn't tell private lenders to prioritize rural small businesses for relief loans - Entrepreneur Generations

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