Government’s PPP Program Lost Millions to Scammers
In a new nationwide trend, fraud cases related to the Paycheck Protection Program continue to arise.
For countless businesses, the PPP was a lifeline that provided loans and guidance in the early weeks of the COVID-19 pandemic. As 2020 comes to a close, it is now clear that the quick rollout of the massive relief program in a matter of months has presented a set of concerning findings.
Hannibal Ware, the Small Business Administration Inspector General, stated that there are strong indicators of widespread abuse and fraud. In an interview with Pursuit Magazine, he emphasized the severity of the findings.
“Inspectors General across the Federal Government have seen fraud in programs aimed at the pandemic response. SBA’s pandemic response programs are a particularly attractive target for fraudsters, and SBA OIG’s oversight work has identified gaps in SBA’s internal control environment for these programs. We have seen everything from identity theft to false statements, to fraud schemes perpetuated by sophisticated crime rings.”
Among the list of federal cases, one high school coach is accused of pocketing nearly $1 million dollars and a Florida resident allegedly used his PPP loan to purchase a Lamborghini.
Seven individuals have also been indicted in Houston, accused of collecting nearly $16 million.
In Alabama alone, 70,331 businesses received a total of $6.245 billion in PPP loans. News organizations have since filed lawsuits in federal courts to enforce the release of the applications, arguing that other SBA loans are public record.
Caroline Sicone, executive director of the non-partisan government taxpayer watchdog group, Accountable.US, argues that the PPP loans presented an opportunity for wealthy companies to benefit.
“For every deserving business that got a loan there was a well connected, wealthy special interest that didn’t need the money,” she said. “All of this should be released. It’s taxpayer money and has always been released in the past.”
As more cases shed a light on the mistakes and lack of regulation, the instances of fraud present an opportunity for hindsight and a lesson for the future.
The Alliance to Save the American Dream is a non-profit organization dedicated to three core goals.
1. Develop an Ideas Factory to give small businesses and industries a centralized place to share innovative ideas that must be considered.
2. Build a unique Resources portal for small businesses to go to for answers or resources that address a wide range of issues or challenges.
3. Offer a new networking opportunity for small business owners to connect while also giving them a platform to share their own personal stories.
U.S. Central Bank to Reduce Minimum Borrowing Amount to $100,000
Federal Reserve Chairman, Jerome Powell, is calling on Congress to return to the negotiating table to push another round of stimulus to help pull the U.S. economy out of a coronavirus-induced recession.
“All of us lived through the years after the global financial crisis, and for a number of those years fiscal policy was very tight,” Powell said in a virtual press conference on Nov. 5. “Further [economic] support is likely to be needed to avoid further spread of the virus and help individuals who, with the expiration of the CARES Act payments, are seeing their savings dwindle.”
Powell spoke about close contact industries, such as restaurants, and emphasized their need for targeted, sustained help. Rates will be kept at near zero until they believe that they are at maximum employment, a huge push to put fiscal stimulus into the economy.
Last month at the National Association for Business Economics Virtual Annual Meeting, Powell reiterated the fact that small businesses are struggling.
“Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” he said in his speech.
On Friday, the Federal Reserve announced its Main Street lending program will be adjusted to better support small businesses. The U.S. central bank will reduce the minimum amount that can be borrowed to $100,000 from $250,000. In addition, the fees associated with the loans have been adjusted to encourage smaller loans.
In an interview with Fox News, Frank Knapp, Jr., co-chair of Small Business for America’s Future, emphasized the need to prioritize policies that will help small businesses recover from the devastating effects of the pandemic.
“We also encourage our current Congressional lawmakers to absorb the message voters sent in electing Biden: they want leaders to take the pandemic seriously, listen to science and stop with the political theater,” he said. “Do not wait until after the inauguration to pass legislation that will help small business weather Covid-19. Get it done now. Small businesses cannot wait any longer.”
Small business owners continue to vocalize the need for stable and solutions-oriented governance. The need for legislation to pass quickly is clear.
The Alliance to Save the American Dream is a non-profit organization dedicated to three core goals.
1. Develop an Ideas Factory to give small businesses and industries a centralized place to share innovative ideas that must be considered.
2. Build a unique Resources portal for small businesses to go to for answers or resources that address a wide range of issues or challenges.
3. Offer a new networking opportunity for small business owners to connect while also giving them a platform to share their own personal stories.
For more information, visit savetheamericandream.com.
U.S. Economy is Slowly Bouncing Back
November 4, 2020 – Alliance to Save the American Dream
As businesses push to reopen and consumer spending continues to increase, the U.S. economy is experiencing a v-shaped recovery, according to White House economist, Joe LaVorgna.
Following the Commerce Department’s third-quarter gross domestic product calculation, data shows that the U.S. economy grew at a record pace. GDP, the measure of goods and services produced, rose by 33.1% on an annualized basis from July to September, surpassing expectations by economists.
Despite the growth, the economy is still 3.5% smaller than it was at the end of 2019 and the previous quarter contraction’s detrimental effects are still being felt by Americans and businesses across the country.
LaVorgna, the chief economist of the National Economic Council, said in an interview with Fox Business that GDP “also captures investment spending and what we saw were some really strong durable goods orders.”
He further explained that durable goods are “items that last more than three years” and include “things that companies invest in, whether it’s computers, or mainframes, laptops, storage, all those sorts of things that anyone uses to operate a business. Those are accelerating and that does jive with what’s happening on the labor side, which is a real big pick up in hiring.”
The Commerce Department data is also suggesting that quarter 4 will also represent solid growth and production increases will lead to a surge in hiring.
According to the Brookings Institute, the economy was growing at an annualized pace of 2% to 3% prior to the pandemic.
The data does present a promising road to recovery and growth as 2020 comes to an end.
The Alliance to Save the American Dream is a non-profit organization dedicated to three core goals.
1. Develop an Ideas Factory to give small businesses and industries a centralized place to share innovative ideas that must be considered.
2. Build a unique Resources portal for small businesses to go to for answers or resources that address a wide range of issues or challenges.
3. Offer a new networking opportunity for small business owners to connect while also giving them a platform to share their own personal stories.
For more information, visit savetheamericandream.com.
A Shift in Consumer Behavior
As restaurants and bars across the country fight to stay in business, recent data shows that chain restaurants are bouncing back quickly. From Kansas City to New York City, takeout and delivery options are in demand and keeping business’s lights on.
2020 has been a challenging year for restaurants and business owners alike, yet Yelp’s third-quarter Economic Average report presents promising data. According to the new data, released on October 22, reveals that 6,497 new restaurants and food businesses opened in September.
The owners that opened their doors in the third quarter implemented specific measures such as order ahead menus and distant friendly layouts, the report said.
P.F.Chang’s, the Asian-inspired restaurant chain, has measured such consumer habits and is expanding its off-premise restaurants as a result. In New York’s theatre district, the chain has opened its first to-go location in the state. P.F. Chang’s opened three to-go locations in Chicago earlier this year.
“Our new To Go model is effectively a response to consumer behavior,” P.F. Chang’s CEO, Damola Adamolekun, told FOX Business. “We’ve noticed an increase in off-premise engagement with delivery, catering, takeout, which grew to be about 25% of our business in 2019. With that continuing growth, the To Go concept is really a way to reach more guests in more places.”
Three more to-go locations will follow the theatre district’s opening by the end of the year, with additional plans to add another 20 locations nationwide by 2021.
P.F. Chang’s new model focuses on densely populated urban areas and smaller footprints. This allows the chain to have a place in larger market spaces and attract new customers. Each to-go location will be approximately a quarter of the size of their traditional restaurants, making them more affordable and manageable. The chain also plans to integrate delivery services in the near future.
The Alliance to Save the American Dream is a non-profit organization dedicated to three core goals.
1. Develop an Ideas Factory to give small businesses and industries a centralized place to share innovative ideas that must be considered.
2. Build a unique Resources portal for small businesses to go to for answers or resources that address a wide range of issues or challenges.
3. Offer a new networking opportunity for small business owners to connect while also giving them a platform to share their own personal stories.
For more information, visit savetheamericandream.com.
