Do You Qualify for PPP Round Two?

Meanwhile, the economy just lost 140,000 jobs. Japan declares a state of emergency in Tokyo. And Goldman Sachs asks business owners to not wear its T-shirts.

RESCUE LOANS

Do you qualify for the second round of PPP? “The first test is black and white, and you have to meet one of two criteria: Your gross receipts in 2020 are down at least 25 percent compared to 2019. Or your gross receipts in one quarter of 2020 are down at least 25 percent compared to the same quarter in 2019.”

  • “If you have made this cut, many business owners then face a more challenging and grayer decision. You have to sign that you need the money to support the ongoing operations of your business.”

  • “It’s not up to banks or lenders to verify the attestation. But then [business owners] will have to live with the fear of an auditor knocking on their door one day.” READ MORE

The second PPP loan rollout will target underserved communities: “Last year's rollout of the program doled out $525 billion in loans to some 5 million borrowers, but it was marred by complaints that bigger, well-financed businesses such as Shake Shack and the Los Angeles Lakers were the first to benefit and that traditionally underserved communities were initially overlooked in the hurried launch. Following a backlash over whether minority-owned businesses had sufficient access to the loans, the SBA issued specific guidelines for minority, veteran and women employers.”

  • “Among the steps the agency plans to take is to accept PPP loan applications only from certain lenders that focus on underserved and minority businesses and borrowers in distressed areas for at least the first two days of the program.”

  • “The SBA has not said when it will begin taking applications that borrowers will submit through lenders, but sources closely following the rollout expect the restart to happen next week.” READ MORE

CREDIT CARDS

Federal investigators are probing sales practices at American Express: “The inspectors general offices of the Treasury Department, Federal Deposit Insurance Corp. and Federal Reserve are investigating whether AmEx used aggressive and misleading sales tactics to sell cards to business owners and whether customers were harmed, the people said. They are also examining whether specific employees contributed to the alleged behavior and if higher-level employees supported it, some of the people said. The Office of the Comptroller of the Currency is also investigating business-card sales practices at AmEx, according to people familiar with the matter.”

  • “The OCC’s investigation involves cards issued to business owners to replace their co-branded AmEx-Costco cards, according to people familiar with the matter.”

  • “Costco Wholesale decided in 2015 to end its long-running partnership with AmEx, and AmEx launched an aggressive campaign to keep those customers.” READ MORE

THE SBA

Joe Biden has chosen Isabel Guzman to head the SBA: “Ms. Guzman was a senior official at the SBA during the Obama administration, serving as deputy chief of staff. In 2019, she became the director of California’s Office of the Small Business Advocate, where she helped implement a grant program for businesses affected by the pandemic. If confirmed, Ms. Guzman would lead an agency that is best known for its loan programs to provide small firms with capital and has more recently helped businesses affected by the pandemic. Many of the agency’s loan programs rely on partnerships with banks and other financial institutions, which issue the loans and receive an SBA guarantee.” READ MORE

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SOCIAL MEDIA

Here’s an early nomination for 21 Hats tweet of the year from a book store in Washington, D.C. Someone at Capitol Hill Books understands social media: 

THE ECONOMY

The U.S. lost 140,000 jobs in December: “Job growth has slowed in recent months as cold weather, rising Covid-19 infections, and new restrictions on businesses deal a setback to the recovery from the pandemic. The pandemic and related restrictions led to 22 million job losses in March and April; 12 million have been recovered since then. After the sharp contraction in March and April, the labor market quickly snapped back to life, adding a total 9.3 million jobs over the next three months. Since then, job growth has eased each month. Economists think growth will pick up again later this year.” READ MORE

TRADE

The U.S. trade deficit is the widest since 2006: “The U.S. deficit is ‘widening for the right reasons,’ said Joshua Shapiro, chief U.S. economist at consulting firm Maria Fiorini Ramirez Inc., with demand for imports in the U.S. improving and demand for U.S. exports also picking up, just not as much. ‘Growth is improving here and abroad,’ he said. Imports of consumer goods were the highest on record in November, the Commerce Department said. Imports of industrial supplies and capital goods also increased.” READ MORE

The U.S. suspended plans to impose tariffs on French luxury goods: “The U.S. Trade Representative threatened to impose the tariffs last year, in retaliation for France’s 3 percent levy on certain revenue from big technology companies, which the U.S. said unfairly targeted American businesses. The tariffs had been scheduled to take effect Wednesday. The suspension of the tariffs on French products was welcomed by U.S. importers and retailers that had criticized such punitive tariffs as a tool that aims to protect one industry at the expense of another, while hurting American consumers.”

  • “The decision puts the onus on President-elect Joe Biden and his administration to address increasing demands by other countries for global technology companies to pay more taxes where their customers are located.” READ MORE

COVID RESTRICTIONS

Japan has declared a state of emergency in Tokyo: “Japan's leaders believed they had found a way to live with the coronavirus and keep the economy open, relying on widespread mask-wearing and sensible precautions without resorting to mandatory lockdowns. On Thursday, with the limits of that approach becoming clear as the country’s outbreak spirals out of control, Prime Minister Yoshihide Suga reluctantly declared a state of emergency in the Tokyo area. ‘This global infectious disease has exceeded our imagination, and it’s becoming a severe fight,’ Suga said at a news conference.”

  • “The measures include asking restaurants and bars to close early, requesting residents to refrain from non-urgent outings, and limiting attendance at sports and other events to 5,000 people, at least until Feb. 7.” READ MORE

EVENT PLANNING

On Wednesday, the day of the Capitol Hill siege, Goldman Sachs sent “Storm the Hill” T-shirts to small business owners: “They are coming from around the country, from small towns and big cities. They are coming to Washington to share their grievances and demand change. They are coming under a banner: ‘Storm the Hill.’ Er, maybe not. Goldman Sachs Group quickly rebranded an event it is sponsoring next week for small-business owners to meet with lawmakers after an actual storming of the Hill by a pro-Trump mob. The Jan. 13 event is now called Virtual Capitol Hill Day and Goldman has asked participants, who are graduates of the bank’s entrepreneur-training program called 10,000 Small Businesses, not to wear the ‘Storm the Hill’ T-shirts that had been mailed out.” READ MORE