Congress has signed off on the next round of PPP and EIDL funding, and we expect President Trump to sign the legislation today, and this is good news for many business owners who are still struggling to get money.  Meanwhile, I thought I would share some observations and thoughts from the week.

It seems like there are unintended consequences from the decision to increase unemployment payments by $600 a month.  While I understand that this benefit is helping many families keep food on the table right now, it is also causing problems for business owners who received their PPP money and are now calling their teams back to work.  Even when being called back at their original wage, employees are now angry because, in many cases, they can now earn more money on unemployment.

I have heard other stories of business owners who have job openings today at what would have considered a going wage in February, and now can't get help because of the new unemployment incentives.  If the goal is to get people back to work, there is a problem.

There is lots of hoopla and outrage in the press this week about larger and public companies who took advantage of the PPP program and are now expected to return the money or face litigation and congressional subpoena.  To be clear, if a company has the PPP money in their bank account, they can send it back to their lender without a pre-payment penalty, but there is no mechanism for the SBA to be able to reallocate that debt to smaller companies. The systems are not built to handle this scenario.

This scenario begs two questions.  Will Shake Shack and other similar companies who are returning their PPP money are keeping their employees on the payroll as they would have under the program?  And what happens to the $100,000 of fees that JP Morgan earned for processing the Shake Shack application?

Expect a lot of outrage next week from some lenders who don't get their funds out in the ten days required by law following an SBA approval.  I smell legitimate class action lawsuits in the works.

I hope that everybody tries to get some rest this weekend.