Welcome to the Small Business Rundown. Each day, we bring you stories that impact small business owners and their workforce.
Small Business News Highlights for October 29:
- Untold fraud dominated SBA’s COVID-19 Economic Injury Disaster Loan program
- Relief bill still possible before January, says Speaker Pelosi
- Major migration coming as millions of workers switch to remote work
Fraud in Economic Injury Disaster Loan program
“I’ve never seen anything like it. I don’t think they had any processes in place. They just sent the money out.”
A new report for the Small Business Administration’s Office of the Inspector General indicates that the agency may have handed out billions of dollars worth of funds meant for small businesses to scammers instead.
SBA officials, mostly speaking on the condition of anonymity, acknowledged that the SBA was in such a rush to get money into the hands of small business owners, that that there was no real vetting process in place to make sure that the applicants for the Economic Injury Disaster Loan (EIDL) program were legitimate.
All in all, the Inspector General’s report found that as much as $78 billion in fraudulent loan applications were approved, even though not all of that amount was disbursed.
Relief bill still possible before January
“Why would we be talking to them if we didn’t want a bill?”
Speaker of the House Nancy Pelosi expressed optimism that she and Treasury Secretary Steve Mnuchin will reach a deal on a COVID-19 relief package before January. President Donald Trump also went on record stating that they will pass “a very big package” once the election is over.
Speaker Pelosi and Secretary Mnuchin continue negotiations around the issue of funds for COVID-19 testing and tracing. Currently, many economic relief programs — such as eviction moratoriums — are set to expire on December 31.
Economists say that the outlook for the 4th quarter of this year is “very shaky” without additional help from the federal government.
Major migration due to remote work
“Remote work is the fastest gamechanger for the U.S. economy since World War II when almost overnight there was a mobilization of production to provide arms for war.”
Somewhere between 14 and 23 million Americans are planning to move to a new city or state as more companies shift to remote work permanently.
The mass migration has huge implications for many cities as they face financial crutches, falling housing prices, and a shrinking tax base.