Why Aren’t Small Businesses Interested in Main Street Loans?
The Federal Reserve is making some changes to its Main Street loan program, which is supposed to be aimed at small and medium businesses.
It hasn’t been as popular as the Paycheck Protection Program – the Fed has so far only granted about 400 loans. Now he says he is lowering the minimum amount that businesses can borrow to $ 100,000.
By allowing companies to take out smaller loans, the Fed said he hopes more companies will participate.
“We can definitely find places to use the money,” said Ashwin Deshmukh, owner of Manhattan Cocktail Bar Short Stories. He said he was applying for a loan on Main Street.
Unlike his Paycheck Protection Program loan, this one would not be forgivable and would have to be paid off in five years.
“It gives us a little break to undertake something that we have to pay back on a five-year basis, when most companies don’t know if they’ll be there in five months, let alone five years,” Deshmukh said. mentionned.
The interest rates of the loan are north of 3%.
Matt Hetrick heads the accounting firm Harmony Group. “You’re talking about loans with very, very similar terms to the loans you would get from banks, say, before the pandemic. ”
Some companies could benefit from the Fed’s program, said John Lanza of accounting and consulting firm CohnReznick, such as large companies with a few hundred employees and companies that planned to grow before the pandemic.
“We hope to open a new location at the end [of] 2020. We hope to start a new business in 2021, ”Lanza said. “These funds could potentially be used for that. “
But that brings us back to the issue of business confidence. Hetrick said in today’s environment, “There can’t be a lot of businesses, especially in the small business community, that are sitting there saying, ‘Hey, I feel a lot better with it. what I can see in four years; I’m going to be awesome. ‘”
Two bankers who deal with many small businesses told me that they simply saw no point in having their clients join the Main Street loan program.
Why are consumer prices increasing?
Some shoppers may have noticed that their grocery bills are higher lately. Energy prices and used cars and trucks are also on the rise. Jayson Lusk, head of the agricultural economics department at Purdue University, said several factors had pushed up food prices, including China which recently bought more American products, more drivers and challenges related to the pandemic in supply chains and the workforce. In addition, wages are on the rise, even though productivity increased faster as labor compensation for decades. “I expect inflation to probably continue for the next six semesters, at least,” Lusk said.
Learn more about inflation here.
What do the CDC’s most recent mask guidelines mean for stores and their workers?
By now you’ve heard the news on these tips: People with vaccines no longer need to wear a face mask indoors in most settings. Yet local governments and businesses are allowed to demand them. The mask warrants were tricky, even dangerous, so that public enterprises can navigate. Retail workers across the country have been harassed and physically assaulted while applying the mask mandates. “The updated guidelines created an impossible situation for retailers, ”said Lisa LaBruno, senior executive vice president of retail operations and innovation with the Retail Industry Leaders Association. “There is now an ambiguity in expectations, both from members of the retail team and from customers. “
Why do you have to be unemployed for more than six months before you are classified as “long-term unemployed”?
After all, people are starting to feel the the stress and financial hardship of long-term unemployment before reaching the 27 week mark. According to the latest data from the Bureau of Labor Statistics, 4.2 million Americans are long term unemployed. Patrick Carey, deputy commissioner in the Bureau of Employment and Unemployment in the Bureau of Statistics, has an explanation. “The break of 27 weeks or more fits well with the maximum length of time many states offer regular UI benefits,” Carey said.