Source: Triangle Business Journal
Two dozen state attorneys general wrote a letter to U.S. House and Senate leaders regarding the Paycheck Protection Program, Triangle Business Journal reports. The first round of loans “exposed a variety of shortcomings,” the attorneys general wrote.
“First, at the expense of small businesses in desperate need of capital, numerous loans were made to large, publicly traded companies that almost certainly have access to other sources of funding. In addition, $152.4 billion, or nearly 45 percent of the total funds in the first round, went to loans of over $1 million, suggesting that larger, more well-connected companies may have been better able to navigate the application process,” the letter states.
At the time of writing, some 100,000 loans were approved for North Carolina small businesses. Still, the process has been the source of frustration for many trying to access the loans and some banks allegedly acted inappropriately, the Triangle Business Journal reports.
In the letter, Stein and his fellow attorneys general write that publicly traded companies that can access alternative funding should be prohibited from PPP loans. They also suggest that lenders should not prioritize existing customers and should process requests in order of application to avoid favoritism, the article adds.
“We understand that it was necessary to implement the PPP as quickly as possible, which led to predictable stumbles and delays, given the size of the program,” the attorneys general wrote in their letter. “But we can now learn from these mistakes and, as the program moves forward, we can apply those lessons.”
Read more about Attorney General Josh Stein’s efforts to reform the PPP loans for North Carolina small businesses from the Triangle Business Journal.