For the last few days, I’ve been knee deep in helping clients try to understand and put together their applications for the Federal government’s Payroll Protection Program – the government’s Coronavirus small business bailout. As a business lawyer, that’s what I do, help clients with their day to day legal issues, even those that result from once in a generation events.
Fortunately for my clients (and for me), they can afford to pay my legal fees and their outside accounting fees to address what, to put it generously, has been a highly fluid, pressurized and complicated process, not to mention the considerable internal labor cost of providing the supporting documentation to be filed with the commercial banks that will be advancing the loans to small businesses. And most of these businesses have well established relationships with their banks that they can leverage to maximize their chances of being put on the top of the pile for what essentially is a limited pot of money (you’ll be surprised at how quickly $349 Billion can go!).
Which begs the question, what about those small businesses that don’t have the resources and relationships to support mobilizing their internal and external resources with sufficient speed to get their piece of this taxpayer funded pie?
The answer, I’m afraid, may be more consequential than just a matter of who stays in business and who doesn’t. If the resentment generated by the bailout of the banks in 2008 is any indicator, there is likely to be significant political backlash if the outcome to this bailout is viewed as being more of the same from a rigged system that benefits the wealthy and the connected. And whereas the vaudevillian villain in that crisis was a faceless financial system, here there will be fortunate villains on every corner of the country for the unfortunately resource-challenged small business owners to level their antipathy at.
In fairness, the Payroll Protection Program does appear to be well-intended and provides a brief, albeit essential, respite for small business. Unless the Federal government, however, addresses and remedies the uneven distribution of its funding in subsequent rounds of stimulus funding (yes, additional rounds are inevitable) the weaponization of resentment may soon find a street corner near you. Even with these remedial efforts it may be too late, for a significant number of businesses across this country, access to this round of stimulus funding may mean the difference between lights out and keeping the lights on.
And we may not find a vaccine for that type of political instability anytime soon.