In response to the passage of the federal stimulus bill, ILSR Co-Director Stacy Mitchell released the following statement:
“The stimulus bill will dramatically accelerate corporate concentration. It opens up a massive spigot of easy cash for the largest corporations, while consigning small businesses to a slow and cumbersome process of applying for loans from a limited pool of funds.
“With sales flatlined, millions of small businesses are at urgent risk of going under during this crisis. Yet the pool of money Congress has made available to small business for forgivable loans ($349 billion) is woefully inadequate to the scale of the need, which we estimate is about $1.2 trillion to cover core costs for small businesses in the most affected sectors. This problem is made worse by the fact that the bill allows individual locations of chain restaurants and hotels to apply for forgivable loans as “small businesses,” thus shrinking the pool of funds available to actual small businesses.
“To access these funds, small businesses will have to apply for SBA-backed loans through banks. In normal times, the SBA’s loan approval process is notoriously cumbersome and slow. We are deeply concerned that the SBA does not have the ability to scale-up to handle this volume. This bill anticipates that the SBA’s 7(a) loan program will process about 14 times the loan volume in a matter of weeks that it processed in all of 2019. Already, even with just the small pool of disaster loans made available in an early stimulus bill, we are hearing that the SBA’s website is crashing and small business owners can’t get through.
“Meanwhile, large corporations will be able to get funds with speed and scale through the Treasury and the Federal Reserve. The bill makes some $4 trillion in funds available to big corporations through the Federal Reserve, all backstopped by the U.S. government. Unlike the small business loans, which can only be used for core costs and are tied to maintaining employment, the corporate giveaways come with virtually no strings attached.
“This bill will accelerate the growing monopolization of the U.S. economy. It’s also a stark illustration of how concentrated corporate power distorts and undermines the democratic process. With their immense economic and lobbying power, big corporations have secured a stimulus bill that fuels their dominance, while undermining the survival of their smaller competitors.”
FOR MORE INFORMATION and to schedule an interview with Stacy Mitchell, call Jess Del Fiacco at 612-844-1330 or email [email protected].
Photo via Pixabay.
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