Small Business Aid Program is Reeling; It Needs More Money ASAP
Author: Greg Valliere
April 8, 2020
THE EVIDENCE IS OVERWHELMING: The $349 billion small business program is in trouble, bogged down by red tape and confusing directives to banks, which are moving glacially — if at all — to get money to companies that need it immediately.
THE COMPUTER GLITCHES AND OTHER SNAFUS eventually will get ironed out, perhaps by the end of April. But there’s another problem that has to be addressed much sooner: the small business program is woefully underfunded, and Congress will have to authorize another $250 billion ASAP.
SENATE MAJORITY LEADER MITCH McCONNELL said yesterday that he would seek unanimous consent on Thursday for an extra $250 billion, but he blindsided Democrats, who are eyeing even more assistance. We had thought that a fourth aid bill would move later this spring, but small businesses need massive help within days.
THERE’S A CLEAR CONSENSUS TO APPROVE THE EXTRA FUNDING, but there are two potential snags: First, could there really be a clean bill, considering all the other demands for more aid? Second, most members of Congress don’t want to come back to Washington, but one lone lawmaker could demand a vote — not unanimous consent — which would require members to travel back to the Capitol Hill petri dish.
THE TRUMP ADMINISTRATION clearly wants more small business funding, amid reports that the Small Business Administration is reeling and unprepared for a torrent of applications. The agency is woefully understaffed, with antiquated computers (excellent article on the SBA in the New York Times this morning).
PRESIDENT TRUMP ADMONISHED REPORTERS for not being “nice” this past weekend in their questions about the chaotic small business aid rollout, which is beginning to resemble the botched roll-out of Obamacare. But this is a disaster, to use one of Trump’s favorite words, and his aides know it.
WITH THE FEDERAL RESERVE PROMISING to provide liquidity to virtually every segment of the economy and the markets, we feel reasonably confident that the country can avoid a Great Depression. But a crucial element of Washington’s massive fiscal aid is small business assistance — and if this continues to look chaotic and unhelpful, chances of a V-shaped recovery will diminish.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2022 AGF Management Limited. All rights reserved.