The president of the United Retailers Center (CUD), Jorge Argüelles, assured that small and medium businesses lagged behind in federal program loans “Payroll Protection Program”(The PPP for its acronym in English), since according to alleged banks gave priority to their preferred customers.
Last week the Federal Small Business Agency from United States (SBA, for their acronym in English), reported on its website that it stopped the loan applications to businesses for reaching the ceiling of funds for this purpose.
2,856 loans were granted on the Island for a total amount of $ 658,573,638. However, the process in which the loans were given has generated criticism from various sectors.
The CUD president stated that “we lagged behind. The reality is that here the banks were not very diligent, they dedicated themselves to favoring their preferred clients.” Argüelles argued that of the nearly 3,000 loans granted, the average amount was 230,593. “We are talking about a loan that is basically computed by the payroll of the business. In fact, if you use 75% of what you borrow and the other 25% for other matters such as props, paying rent, perhaps paying mortgage interest, then the loan is forgiven. ” added.
Likewise, the CUD spokesperson stressed that small businesses do not have a payroll of more than $ 200,000. Another argument of the merchant was that states with populations similar to that of Puerto Rico registered up to more than 10,000 approved loans. An increase in funds for said program is currently being evaluated in Congress.
The bipartisan agreement that provides the additional $ funds for SBA programs has been finalized. The Senate will be voting this afternoon and we will be seeing it in the House on Thursday.
– Jenniffer González (@ Jenniffer2012) April 21, 2020
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Meanwhile, a report from the Center for the New Economy (CNE) published a report pointing out flaws on the part of the federal government as well as the banks that managed the loans.
The document states that only 4% of all loans represent approximately half of the total amount of loans approved.
They also mention as a second flaw that “there were no barriers to prevent banks from favoring relatively larger companies within the small business group, companies that probably already had other loans outstanding with those same lenders.” According to CNE analysts, this caused aid to reach the largest states.
Association of Banks defends its management
Meanwhile, in a previous interview with Metro, the vice president of the Association of Banks of Puerto Rico, Zoimé Álvarez Rubio, indicated that five financial institutions on the Island granted about $ 777 million in loans, while defending the management they carried out.
“When we make a comparison with the rest of the states of the Nation, it should not be alone based on the population of the corresponding state. We have to take into account, because this is not an individual aid, this is an aid that is made through banks, and the bank must be certified as lender from SBA, “he said.