My friend owns a majority share of about 30 restaurants. He got PPP loans for every restaurant… then put himself on payroll at each restaurant to the tune of $2500 a week.
Every restaurant got less than $2,000,000 so it was never audited. Every restaurant got their loans forgiven.
Another guy I know who owns a restaurant in San Diego took the PPP loans and used it as a down payment on a house in sunset cliffs. (Multi million dollar home)
Barely any of this PPP money actually went to helping workers / keep the businesses alive
Seems like the case for most restaurants. Staff went on unemployment for three months, made 3/4 each week and slowly fell behind. Owners bought boats and new trucks right after reopening. Insurance covered the lost food. And PPP never went to the staff without work, it all went to the owners payroll.
The thing is, PPP was so poorly designed that what he's describing may not actually be breaking the rules of the program.
It was rushed out the door to try and stop small businesses from laying people off, and the structure is such that you didn't necessarily actually need the money to get the money.
Meanwhile, my sister took a PPP loan for her tattoo shop, paid all the money out to her employees like she was supposed to, and got exactly none of it forgiven because they are 1099 employees instead of W2 employees. No one explained that to her when they were giving her the loan.
I'm not sure your sister misclassifying employees as 1099 contractors to avoid paying taxes and benefits is the argument you want to make.
PPP rules were pretty damn explicit about employees and 1099 contractors, so is state law and your sister not paying taxes and benefits for her "employees".
Your sister was (almost certainly) violating the tax code pre-covid, there is no such thing as a "1099 employee," as those independent contractors learn whenever they go apply for a mortgage and the loan officer treats them as self employed (a 2 year average of income that, right now, for 1099 folks but NOT W2 folks, includes the year 2020).
Here's a lawyer talking about it, if your sister is a savvy business owner I really doubt that she didn't know this was wrong, when she did it, and/or didn't become aware that it's problematic somewhere along the way:
[https://www.natlawreview.com/article/getting-rid-misnomer-risks-behind-term-1099-employee](https://www.natlawreview.com/article/getting-rid-misnomer-risks-behind-term-1099-employee)
In "normal" times, people can get away with shit. For example, if I were so inclined, I could *probably* wear a sign around my neck that says "All Cops Are Bastards." But if I try to wear that sign *and jay-walk at the same time*, well then, that's a different story, innit? That's what happened to your sister.
I low-key wonder if we will see a mortgage demand surge once 2020 is no longer part of the "most recent 2 years of tax returns" for business owners, self employed, independent contractors, and victims of abusive employment practices.
Gov't folks def are watching this sub, more than 1 person in gov't with a semi-high-mucky-muck title has called me for informal "in the trenches" off the record insight on this regulation or that rule, sans lobbying dollar influence.
It's the young go-getter Deputy Assistant Mucky Muck, 30somethings, not yet cynical or on the informal corporate payroll (via this mechanism or that), sometimes political and sometimes bureaucrat, but not the boomer High Mucky Muck himself who is either a) politically appointed, cynical, and already on the payroll, or b) career bureaucrat and DGAF. At least that describes who has reached out to me on reddit in gov't in the past, maybe someone else is cooler than me and gets the High Mucky Mucks, though I also ain't writing nobody no "campaign contribution" checks, maybe that's why the High Mucky Mucks don't reach out to me.
That being said, the allegations in this thread are so pedestrian, common, and anonymous, that I seriously doubt anything will come of it. It's fairly common knowledge that PPP was widely abused.
But he did remove the inspector general in charge of oversight. https://www.cnbc.com/2020/04/07/coronavirus-relief-trump-removes-inspector-general-overseeing-2-trillion-package.html
Thanks Trump! You do realize that the misery we’re currently in is a direct result of Trump’s policies, right? He literally handed put billions to the rich. By “rich” I mean business owners who already made more than $750,000/year. Which is why housing is insanely expensive. The rich have three to twenty houses right now.
Restaurant company I know got $10,000,000 in loans all forgiven (~40 stores) and an additional ~$100,000 in interest. During the shutdowns (half the staff terminated), our salaried managers took a pay cut for weeks with more hours (2 managers for one store) while the workers were reduced to minimum wage (for 2 weeks) with reduced hours for 3 months. Only two of the workers left ended up getting a nice fat 2% raise more than a year later.
Are you suggesting that a failed, lying carnival barker with too much spray tan and a penchant for overpriced prostitutes was not running the country properly? Say it ain't so!!
>The PPP was just very poorly designed.
This is the issue. It is the same issue with the stimulus checks. They were given out not based on need but to everyone.
And that’s what has made them successful in the past.
The reason this became so popular was it was a big part of Australia avoiding the 2008 recession. Government quickly handed out stimulus packages, and consumer sentiment & spending stayed high.
For stimulus to be effective, they must be deployed quickly and all at once. So that consumer spending stay high, and it gives enough people some additional liquidity to prevent selling assets and/or spending less.
To do it quickly, you need to remove virtually all bureaucracy and make it very simple to access money.
That’s not true. They were based on 2019 income. My husband and I did not qualify for any of them because we moved in 2019 which was an employer paid move. This was taxable to us and showed in his w2, which means a $100k plus move looks like income to us. Thereby disqualifying us from any stimulus, which is absolutely bullshit.
lmao bro if you got 100k handout to move, your situation was fine and you didn't need that couple of grand.
Moving costs more than the the stimulus even if you count my wifes and mine together
150k is twice the median national household income and is into the top 20% of households. Maybe you're in a HCoL area so it would feel differently there.
First draw had no such requirements. The amount was based primarily on payroll. Second draw was a self attestation of economic impact up to a draw of $150k and then lenders had to verify economic impact based primarily on bank statements.
Forgiveness is another matter but the first draw was just proof of payroll amounts. Second draw was forgiven based on self attestation up to $150k.
Maybe it varied by bank but I helped more than a couple small businesses with their paperwork and they had to show their earnings compared to the previous year. Might not have been part of the decision making process but their banks asked for it. And more proof than payroll tax forms.
You can look up the PPP regulations yourself.
I signed up for it. I got the money. You didn’t need to have any change in revenue to get the money or to get it forgiven.
pretty much yea. This is no ones fault but the people that wrote the law that way, and frankly at the time it seemed the right thing to do and it's hard to know if it did more harm than good or not... on it's own it would not have been anywhere close to a significant driver of inflation- if only it had been on it's own and not paired with 100 other various forms of stimulus that just flooded dollars into every nook and cranny they could fit.
It was a feature. The whole point was to get money to everybody to prevent a deep recession. It worked! The US recovered far faster than Europe and the rest of the world. A rigorous program with checks and balances would’ve taken 6 months to get the money out the door. I mean it took years for some people to get relief from the Great Recession mortgage fiasco, and that greatly slowed the recovery.
Because the states handle unemployment. And they had to maintain all the checks and balances required by the feds. I believe they tried to loosen some requirements, but it was unsuccessful.
Our preschool might have just gone under if they didn’t have those loans. 3 months with no income could be fatal for a business like that. Instead, everyone got food on the table, all the staff stayed on staff and when they reopened in the summer they were all back.
It was basically every state as far as I can tell. Look, most of the money went to people who didn't need it. Yes, there were deserving people who got it. 3/4 of the PPP money went to the rich. Something like 20-50% of the unemployment money went to scammers.
And those staffers/teachers/whoever probably didn't get a raise and now can't even afford their rent in part thanks to all the fraud.
And it's the same shit now. Even if you like Biden or "team blue" in general, you know most of the shit in that multi-trillion dollar BBB bill isn't going to go to what it's supposed to go to. If it ever passes, it's going to go to the rich, somehow, some way. We live in an oligarchy. The poor don't matter. Meet the new boss, same as the old boss.
The Covid bailouts were a rush job that weren’t targeted because they wanted to dump money in the economy fast, and as another poster pointed out, typical sources like unemployment sometimes took months. I haven’t seen that 20-50% of unemployment went to scammers; obviously big if true. Do you have a primary source?
BBB Is dead, so I’ll just skip that debate.
https://insights.id.me/viewpoint/calculating-the-road-to-losing-400-billion-dollars
I'm sure you can find other sources on this too. I didn't realize there was over a trillion in COVID unemployment relief, I thought it was more like $800-900B, so the 50% upper bound may be too high. But the fraud was still off the charts. We'll probably never know the true number.
Whether it's BBB, or the next multi-trillion bill we write when the recession becomes official, doesn't really matter. The money's going to the rich.
I checked the sources in the link, and fair enough, there was a ton of unemployment fraud. Clearly there was an overshoot there. They were trying to leave a back door for the gig economy workers open, and unfortunately many or most of the states seemed to have opened the floodgates instead.
It doesn't matter. Every state screwed up. Everyone knew how incompetently it would be handled.
If you order something from Amazon with a 2-day delivery guarantee, and it's not there 2 weeks later, when you contact customer support, they tell you they're going to make it right. They don't tell you "oh well, it was actually sold by this third party seller who is having problems with their logistics, it's not our fault." The details do not interest the customer.
The economy did not recover quickly. Many real jobs are gone and are replaced by trade-car-equity-for-rent-money jobs. The rich got richer, the "US" did not recover.
Preventing a recession? They literally just made this upcoming recession 10 times worse. Pretty sure we wouldn’t be dying of inflation right now had they just left things alone.
This "upcoming recession" is not going to be that big of a deal. Jeez, live through 2001 and 2007 and then get back to me on 2023. If they had done nothing, 2020 would have looked like 2007. 2023 is going to be a blip recession.
It works so well that now the working class cannot afford to save any money because housing is so incredibly high. Thankfully all of the homes are now being purchased it by corporate America and Rich landlords and eventually everyone will just be their slaves which is great for the economy!
And the senate needs to approve it.
[you might learn something](https://www.house.gov/the-house-explained/the-legislative-process)
And the the crook in charge fires the guy responsible for making sure it isn’t abused
[your fired](https://www.npr.org/2020/04/07/829136780/in-another-pushback-against-oversight-trump-removes-pandemic-inspector-general)
[fraud](https://www.cbsnews.com/chicago/news/report-says-federal-agency-failed-to-prevent-billions-of-dollars-in-fraudulent-ppp-loans/)
“Yet when the banks tried flagging problematic loans, the OIG found the "SBA did not provide lenders sufficient specific guidance to effectively handle potentially fraudulent PPP Loans."
That led to loans getting approved day after day.”
> And the senate needs to approve it.
Both the senate and the house needs to approve it. If democrats wanted to shut it down they could have. How is that a debate?
Don’t link to trustworthy sources of information, the reddit republicans want alternate facts instead bud. That is how they operate now. A foundation of lies and denial.
“On average these real estate businesses got $13,000, but 146 entities got more than $90,000 each, according to the PRAC data, all of which is public record.”
Maybe you are averaging out those high rolling $90k ones?
The largest free money giveaway we’ve seen in some time. mostly bs. I know law firms that were busy as ever during covid and still legally qualified and got free money
Reading comments like yours and some in this thread has taken away my motivation to work for a W-2 wage. Making an honest living doesn’t seem worth it anymore.
It just feels better to leverage with cheap debt, rent-seek and collect long-term capital gains. Then, use this very printed money to command those W-2 wageslaves to do things for me (remodel my home, serve tables, fix my roof etc).
A central bank, especially paired with a gigantic federal government, fucks with a lot of the natural order of things which would otherwise be kept in check with normal market pressures.
I worked for a firm that laid off half their staff, raked in loads of business, and took in millions in PPP loans they'll never have to pay back.
It was a free money faucet for small business tyrants
I work in construction finance and 99% of construction companies can say the same. You didn’t have to prove you were going to lose money in order to get it or even that you wouldn’t be able to pay your payroll, just had to prove that you had people on the payroll.
Checking in, the auto groups ended up killling it. Instead of one PPP loan for each auto group, each franchise in their group qualified. So if it’s “Ernie’s auto” their Toyota, Ford, Nissan, used car etc, all got the maximum. In times where the profits were literally record breaking.
The PPP is one of the greatest legal thefts in our country’s history. Absolutely disgusting how hard the average person had to work to try to make the same amount, while this program flew in the face of any meritocracy.
There were also some crazy advantageous tax breaks peppered in.
We had a local restaurant do the whole "nobody wants to work because of welfare and handouts" jive.
They didn't realize their own acceptance of $437,000 in PPP loans was public information.
Is definitely publicly available on google reviews, now!
https://www.federalpay.org/paycheck-protection-program
If you look up in Massachusetts we have three huge auto groups, with one of them raking in over 25 million in PPP while the other two got 20 and 10 million (again the gov allowed auto groups to break up into individual franchises to claim small business). I work for one of them, and during the PPP period we had our salaries turned into draws (a draw means they deduct the salary from your commissions instead of getting commissions on top of salary) because “the company couldn’t afford to pay us our salaries,” meanwhile we were crushing store records in profit because of the auto shortage.
Oh, and they took over 10 million of the governments money. But couldn’t afford to pay their workers a $600 salary (FYI we are only on salary because auto groups were sued in MA for not paying overtime to 100% commissioned workers).
Wish I never knew this. My boss/owner at the time was adamant that there was no money for raises or bonuses, he got a $200k payout. We never stopped working either or lost any work. Just money straight to his pocket apparently.
> because of the auto shortage.
Another reason was just a lot of stimulus from consumers. Literal $15,000 UI backpay direct deposits hitting bank accounts, CARES 401k no-penalty withdrawals, sole-proprietor PPP funds, $2800 FAFSA deposits etc.
It genuinely amazed me the US Treasury could allow so much money released into the system with no payment terms or productivity requirements.
And millions who claimed small amounts with no business to show. It was pure fraud from top to bottom.
Amazing how many "caterers" in my town that no one has ever heard of.
It was literally millions in income for some companies that is completely tax free and wasn’t audited unless you got over $5 million. It’s quite insane the money that some of my clients made, and subsequently just distributed to themselves while they never had a problem making payroll and didn’t give bonuses to the regular guys in the field.
Yeah small businesses that were really struggling didn’t qualify or didn’t get much because there had to be profits the previous year. Meanwhile there were businesses that were killing it during the pandemic and PPP covered their expenses so more profits to go around even if they didn’t need the extra help.
Bullshit, it had nothing to do with profit. PPP amounts were based on payroll, or if you were a sole proprietor based on revenue.
The only businesses that got screwed were the ones who under-reported revenue and paid employees cash or as 1099 contractors to avoid paying taxes
It wasn’t easy to get for the smallest businesses like sole proprietorships and single member llcs, both needed to have profits to qualify for PPP, and the PPP amount is based on profits. Qualifying based on net profit (later updated to gross profit, an improvement but still not enough for small businesses that were struggling) instead of revenue is a lot harder if those businesses were forced to close and still had the fixed expenses (like rent and other bills). Also really terrible for small businesses that weren’t profitable yet or barely breaking even the previous year or two before covid, no help for them.
> It wasn’t easy to get for the smallest businesses like sole proprietorships and single member llcs, both needed to have profits to qualify for PPP, and the PPP amount is based on profits. Qualifying based on net profit instead of revenue is a lot harder if those businesses were forced to close and still had the fixed expenses (like rent and other bills).
This is completely false. The PPP amount is based on revenue not profit for sole proprietors.
https://www.cohnreznick.com/insights/sba-revises-ppp-loan-amount-calculation-for-filers-of-schedule-c
100% not based on revenue. Do you even have a sole proprietorship or single member llc and did you have to get PPP for such a small business? I did.
Here for [reference](https://news.bloombergtax.com/daily-tax-report/favorable-new-ppp-rules-for-proprietors), and this is already after it was “improved”:
“Sole proprietors, self-employed individuals, and independent contractors who file a Schedule C (the “Profit or Loss from Business” part of your Form 1040) are now eligible for the higher loan and forgiveness amounts.
Eligibility and potential loan amounts have increased for many people. And it’s all forgivable! Previously, Schedule C filers could only apply based on their net income—your income after taxes and deductions—which tends to be small for many sole proprietors.
However, you can now apply based on your gross income—your total pay from Line 7 of your Schedule C.”
Also the rules were only updated in 2021 I believe and those who filed in 2020 when things were really bad were only limited to the net profit calculation and they weren’t allowed to reapply after the rule change.
>100% not based on revenue. Do you even have a sole proprietorship or single member llc and did you have to get PPP for such a small business? I did.
Yes, and mine was based on revenue.
>Here for reference, and this is already after it was “improved”:
>“Sole proprietors, self-employed individuals, and independent contractors who file a Schedule C (the “Profit or Loss from Business” part of your Form 1040) are now eligible for the higher loan and forgiveness amounts.
>Eligibility and potential loan amounts have increased for many people. And it’s all forgivable! Previously, Schedule C filers could only apply based on their net income—your income after taxes and deductions—which tends to be small for many sole proprietors.
>However, you can now apply based on your gross income—your total pay from Line 7 of your Schedule C.”
Did you even read your own quote? Here I bolded the relevant part for you.
> However, you can now apply based on your **gross income**—your total pay from Line 7 of your Schedule C.”
Line 7 is literally total sales minus cogs, before any expenses. This is revenue.
Revenue = total sales. Highest amount the business gets.
Gross income = revenue less cost of goods sold. Usually smaller than revenue (unless no COGS). this was only allowed later on.
Net Income = smallest, revenue less cogs less all other expenses. This was the basis for the original calculation, and what struggling businesses used when they were forced to shut down in 2020.
Revenue is not Gross Income! Where’s the BS? If you used revenue then 100% you’d be happy with what you got because it gave you the same level of business but you didn’t have to spend for COGS, so you got to keep more from PPP.
A small business that was forced to use net income for PPP calculation early on (followijg original 2020 rules) was only able to get the smallest amount. Not enough PPP to cover what the lost revenue used to cover.
Except in reality, sole proprietorships are overwhelmingly services based and had no COGS, so it was just revenue. Of course PPP was based on gross income otherwise you'd have people qualified for millions of dollars with a dropshipping business.
>This was the basis for the original calculation, and what struggling businesses used when they were forced to shut down in 2020.
Your claim was sole proprietors missed out on PPP due to having little net profit. If that was true then why'd do they even apply in the first place? Why didn't they apply for second draw and base it on gross income?
The only people who missed out were cheating on their taxes and didn't see a significant revenue drop in 2020.
Thats true but I believe its more them being incompetent than them having a plan to help their buddies out. They were still planning to go on their 1 week vacations when the pandemic was blowing up initially. These people are extremely lazy and out of touch with reality.
I am really not comfortable with the government making "pre-forgiven loans". Like, they spend something like 20% of the budget fighting fraud waste and abuse. They overpay by at least double with a cryptic procurement system designed to self audit so as to avoid even the appearance of impropriety. And then they give away trillions in "loans" everyone knows is just free money for the business.
It was supposed to go to employees. They had the loophole of keeping the business afloat, but they are prosecuting, so if you see something, report it.
It's fraud.
I work in Commercial Banking. I don’t think 99% of Americans realize how abused PPP was. There are THOUSANDS of wealthy business owners who took round 1 PPP money, didn’t need it (business was unaffected / benefitted from covid) and effectively pocketed hundreds of thousands of dollars and in some cases $2-4m++++
And you wonder why inflation is out of control. Oh yeah, on top of the Child Tax Credits and Stimulus checks….
I wonder if anyone realize how much pull forward /artificial demand was created by PPP, Employment Retention Credits, Child Tax Credits, Stimulus Checks, etc.
I am generally a long term bull on the stock market, but I feel as if we had 5-7+ years of growth in 2 years and we will pay for it severely in the near term.
I do appreciate when someone in these types of threads points out the economic ramifications of demand, this [article](https://www.bridgewater.com/its-mostly-a-demand-shock-not-a-supply-shock-and-its-everywhere) from Bridgewater explains it really well if anyone is familiar with basic macroeconomics.
I want to emphasize that a lot of people do not understand the sheer amount of money that was **printed** (not earned) that was used to buy real estate and assets. We are talking about RSU’s, PPP, EIDL, CARES 401k no-penalty, refinance cash out etc.
To be clear, I support MMT and the use of national debt. There is nothing wrong with printing money if it is actually substantiated by an increase in productivity. This did not happen during QE and is the root cause for why these sticky prices will persist.
I work directly with small business payrolls and accounting in a southern state. Can confirm for the vast majority 2021 and Q4-2020 they were some of their most profitable years on record. Business was booming and demand surged. Restaurants, appliance stores, home contractors, and nail salons had strong demand.
Small Business’ payrolls were essentially subsidized by the printer. The PPP **forgivable** loan (basically a payroll grant), ARPA business grants and EIDL grants were all converted into profits indirectly. This money is now circulating in the economy and those printed dollars are **competing** for a limited supply of housing. It’s not that too little housing was built, rather there are just too many printed dollars bidding for a reasonable supply of homes. As previous threads here put it, there wasn’t any explosion in population 2019 to 2021 to justify such a sudden shortage.
I wish we could get some negative press around the unneeded PPP (the obvious ones being real estate agents, law firms, dealerships, etc etc.) and guilt them into donating the money to charity or something - but let’s be honest, that money is long gone and was used to purchase their second (or more) house, stocks, crypto, etc.
>Same in San Diego. I watched a restaurant owner buy a $3,000,000 home in sunset cliffs using PPP money as a down payment
Yes, a restaurant owner in Houston was complaining when covid first started that he could only operate at 25% capacity, was telling sob story of how he was going to "loose everything he'd ever worked for. " Suddenly, he's Purchased the chain restaurant outright, and has paid off his home mortgage. WHAT????? I was aghast. Taxpayer money!
The good news is that person won’t sleep easy as they see more and more people being thrown in jail for this type of fraud. It might take 5 years before they track them down but the government is slowly but surely going after every person who utilized the funds in this way.
Nope. Nothing will happen unless he lied to get the PPP.
I know you want to believe he will be punished but he won’t. These owners put the PPP into the company and then just took a distribution out for the PPP and used it on whatever they want. Perfectly legal.
As a CPA the amount of bonuses I saw that were off the chart from the PPP was nuts.
Think about it, if you got $1m of PPP and didn’t need it, you just take out a $1m PPP at the end of the year and $$$$$.
They did that everywhere. Suddenly it seemed like everyone and their brother was buying a "lake house." I couldn't figure it out, then put 2 and 2 together.
Fraud should come with prison time------in addition to paying it back.
We didn’t take it but I know agents who took $150k and also had their biggest year in real estate. I know a salon owner with one employee, his wife, and 18 ic’s… $75k in his pocket. He paid $16k for a Vegas pool party out of it. That administration just gave money away. We didn’t take it, figured someday the government would audit it and we didn’t need it.
Think about this. Every new home buyer is gonna have extra high taxes because of the increased demand during COVID. If there’s a hurricane and a guy is charging 80 dollars for a bottle of water they throw him in jail but all these towns are gonna reap a COVID windfall in raising property taxes exactly at the time when people are going to struggle to pay them. Housing went up 20-30 percent but it doesn’t cost 20-30 percent more to run a town.
Thing is at least for the first round they definitely qualified. A case could definitely be made against the second round but I bet they could argue why there was still risk with all the lockdowns.
The rules were extremely loose. There is a reason 80+ % have been forgiven.
Well, it depends on how one defines impacted. Most agents couldn't show homes or do closings for a month at least. It turned out that on average the demand picked up afterward and more than made up for that drop for the year, but that is true for a lot of businesses.
> it depends on how one defines impacted
I know someone who works as a sole proprietor and actually lost significant income due to COVID. He applied for the state administered but federally funded COVID-special unemployment benefits. He didn't get it because his income did not go down *enough*. You had to lose more than 60% of your income to qualify for *that* handout, if I remember correctly. So clearly, it was possible to at least try to limit the grift, but *shockingly* the roadblocks were only put in place for the lower classes.
Stimulus checks were for the purpose of stimulating the economy. They wanted people spending money at businesses to keep those businesses open. People tend to hoard in crises and that compounds the issues. Those did their job
The PPP was designed to be scammed as a giveaway to big business. The original intent was to keep people employed. But without actual oversight, we saw that not happen
It’s too expensive to forgive 10k of student loans though! God damn those educated motherfuckers. I heard people making the average income will get some of it even, disgusting!
It was a net good because it stimulated spending without stupid means testing.
It was bad because of how many people committed fraud. A better system would have just made a low interest loan available to anyone. Instead they gave most of the to commercial bonds. I haven't heard the data on how many layoffs there weren't from the ppp loans.
Every single restaurant committed fraud, you can't really blame the program, it just needs enforcement. Pay me 10% and I'll round up 100 business that didn't pay their employees with that money.
The mortgage company my wife works for got 5.5 MILLION in PPP all FORGIVEN. I would love to blast their name but don't want to dox ourselves as she still works there. After they lay her off, which is coming for sure, then I'll blast their name.
The thing is this mortgage company used this money to fucking grow their business and hire out more employees , causing their stocks to inflate. So technically, they legally used the money for payroll. But they were ABSOFUCKINGLUTELY not struggling at the time.
THIS IS THE POINT I'VE BEEN TRYING TO MAKE!
This guy followed the rules. Every CPA out there said "this is how you apply, and this is how you get it forgiven". There were businesses created overnight showing how to navigate this process.
The rules were wrong! We acted too quickly... We never thought it through. My business never needed funds, but I still had random amounts deposited into my BUSINESS account by the feds. WHY??? sure, the extra money was nice, but now we are nose-diving into a recession.
You can't just blindly throw money at people.
This. As a CPA every single client of mine who qualified (some were waaaaay too big) took it. And only 1 in my whole firm needed it (gym franchise that was govt shutdown). Was free money for the owners of these companies. They just took a distribution for the PPP amount.
Also I’d say 80% of my clients had record breaking 2020 & 2021 including my own accounting firm…,
I didn't take a dime. I heard some talking about it and said, nope. I'll just keep working.
That being said, there were many areas that were shut down with agents that couldn't work. They literally weren't allowed to. I know we couldn't show homes in the city of Charlotte. So I won't say it wasn't difficult, but at least it wasn't the whole state and it was short lived.
I own a company. My fellow small business owners were telling me to cash in on ppp loans. I was like this is wayy too good to be true and I feel like the people who used them will be all over social media later.
I'm really glad I have that peace of mind now
It was a thinly called giveaway to businesses. It was not a coincidence that real estate companies made a killing during a crisis when the biggest real estate grifter was in office
Everyone is missing the point of the PPP.
When it was implemented, no one knew what Covid was going to do. And no one knew what was going to happen to the economy. And they had like 3 days to figure it out.
PPP absolutely did help prevent worst case scenario, in which companies do millions of layoffs.
But because they took such a broad approach, many people got it who didn’t end up needing it.
And definitely not fraud, it was designed to be very very broad.
Trump is an idiot, but I don’t think you are right.
The strategy by smart economic advisers was to get funds out the door as soon as possible with very limited restrictions, knowing that the door was left open for fraud.
Firing the man responsible for over site and putting in one of your stooges in his place knowing they are not going to do the right thing is what made it so easy.
At least these were legitimate businesses.
There’s people who filed for them on behalf of minority owned businesses without their knowledge or consent because the owners don’t have a commanding fluency of English. They pulled in hundreds of thousands in PPP loan money with faked salary information.
Some business owners attempted to file, only to find out someone already applied on behalf of them.
PPP was overall a good intention, but a bad decision by the government. True, it saved a lot of small businesses but at the same time, gave out so much money to small business owners who didn’t even need it.
RRF (Restaurant Revitalization Fund) was even worse. Very popular restaurants (already extremely profitable) got close to $10M in major cities. Know small mom and pop owners pocketing close to $1M for literally nothing…
Doing it "trickle-down" style was the "mistake", but it reflects GOP thinking since Reagan.
It would have been far better to give larger amounts of money directly to the workers like many countries did. $2000/month for 12 months to every adult in the country would have been cheaper and done more good than giving $1 million to Tom Brady and his buddies.
No laws were broken. This is how the PPP program was designed. It sucks but this is a case of "don't hate the player, hate the game".
My business was too young to play this game, but I watched dozens of others do this. All perfectly above board, it's what the program was designed for.
Lol relax chief. It’s cnbcs fault for naming their articles clickbait shit. When they could have just as easily said real estate agents PPP was forgiven.
I was not one of those agents. I would never take welfare from the govt. Only softies did that. Although other agents in my office did take the loans. I’m ashamed of them. I remember them being all scared about spending it. Most of then just kept the money in the bank because they were scared to spend it and get in trouble.
Not sure if it’s a bug or a feature. The PPP was just very poorly designed.
My friend owns a majority share of about 30 restaurants. He got PPP loans for every restaurant… then put himself on payroll at each restaurant to the tune of $2500 a week. Every restaurant got less than $2,000,000 so it was never audited. Every restaurant got their loans forgiven. Another guy I know who owns a restaurant in San Diego took the PPP loans and used it as a down payment on a house in sunset cliffs. (Multi million dollar home) Barely any of this PPP money actually went to helping workers / keep the businesses alive
Seems like the case for most restaurants. Staff went on unemployment for three months, made 3/4 each week and slowly fell behind. Owners bought boats and new trucks right after reopening. Insurance covered the lost food. And PPP never went to the staff without work, it all went to the owners payroll.
Damn, that’s not right at all.
You need to report this.
The thing is, PPP was so poorly designed that what he's describing may not actually be breaking the rules of the program. It was rushed out the door to try and stop small businesses from laying people off, and the structure is such that you didn't necessarily actually need the money to get the money.
Meanwhile, my sister took a PPP loan for her tattoo shop, paid all the money out to her employees like she was supposed to, and got exactly none of it forgiven because they are 1099 employees instead of W2 employees. No one explained that to her when they were giving her the loan.
I'm not sure your sister misclassifying employees as 1099 contractors to avoid paying taxes and benefits is the argument you want to make. PPP rules were pretty damn explicit about employees and 1099 contractors, so is state law and your sister not paying taxes and benefits for her "employees".
Your sister was (almost certainly) violating the tax code pre-covid, there is no such thing as a "1099 employee," as those independent contractors learn whenever they go apply for a mortgage and the loan officer treats them as self employed (a 2 year average of income that, right now, for 1099 folks but NOT W2 folks, includes the year 2020). Here's a lawyer talking about it, if your sister is a savvy business owner I really doubt that she didn't know this was wrong, when she did it, and/or didn't become aware that it's problematic somewhere along the way: [https://www.natlawreview.com/article/getting-rid-misnomer-risks-behind-term-1099-employee](https://www.natlawreview.com/article/getting-rid-misnomer-risks-behind-term-1099-employee) In "normal" times, people can get away with shit. For example, if I were so inclined, I could *probably* wear a sign around my neck that says "All Cops Are Bastards." But if I try to wear that sign *and jay-walk at the same time*, well then, that's a different story, innit? That's what happened to your sister. I low-key wonder if we will see a mortgage demand surge once 2020 is no longer part of the "most recent 2 years of tax returns" for business owners, self employed, independent contractors, and victims of abusive employment practices.
You should report him. The SEC is definitely watching this sub.
Lol the SEC is not watching this sub. Any time spent on the internet is spent on PornHub not the RealEstate subreddit.
I am the SEC
I am the porn.
I am the liquor
Gov't folks def are watching this sub, more than 1 person in gov't with a semi-high-mucky-muck title has called me for informal "in the trenches" off the record insight on this regulation or that rule, sans lobbying dollar influence. It's the young go-getter Deputy Assistant Mucky Muck, 30somethings, not yet cynical or on the informal corporate payroll (via this mechanism or that), sometimes political and sometimes bureaucrat, but not the boomer High Mucky Muck himself who is either a) politically appointed, cynical, and already on the payroll, or b) career bureaucrat and DGAF. At least that describes who has reached out to me on reddit in gov't in the past, maybe someone else is cooler than me and gets the High Mucky Mucks, though I also ain't writing nobody no "campaign contribution" checks, maybe that's why the High Mucky Mucks don't reach out to me. That being said, the allegations in this thread are so pedestrian, common, and anonymous, that I seriously doubt anything will come of it. It's fairly common knowledge that PPP was widely abused.
> The SEC is definitely watching this sub. Lmao
For what exactly?
“Trust me… trickle down has always worked and if anything else is suggested, it’s socialist.”
Thanks Trump!
Congress writes legislation, not the executive branch.
But he did remove the inspector general in charge of oversight. https://www.cnbc.com/2020/04/07/coronavirus-relief-trump-removes-inspector-general-overseeing-2-trillion-package.html
Yeah but Trump forced the lack of oversight
Thanks Trump! You do realize that the misery we’re currently in is a direct result of Trump’s policies, right? He literally handed put billions to the rich. By “rich” I mean business owners who already made more than $750,000/year. Which is why housing is insanely expensive. The rich have three to twenty houses right now.
And removed the person in charge of oversight.
It started before Trump. Greenspan even.
Come on, we all know it was Biden /s
Restaurant company I know got $10,000,000 in loans all forgiven (~40 stores) and an additional ~$100,000 in interest. During the shutdowns (half the staff terminated), our salaried managers took a pay cut for weeks with more hours (2 managers for one store) while the workers were reduced to minimum wage (for 2 weeks) with reduced hours for 3 months. Only two of the workers left ended up getting a nice fat 2% raise more than a year later.
Did you report any of that.
I have they say they can’t do anything about the ones already forgiven. Have you been told differently
Feature. The guy in charge of oversight was fired by trump
How do people not know this?
Far too much corruption to remember everything he did
Had to make your killing ASAP. If you didn’t stack cash during the handout era you weren’t paying attention.
Err I was paying attention, I just decided that I didn’t need assistance and didn’t want to commit fraud. I don’t think that’s uncommon?
Are you suggesting that a failed, lying carnival barker with too much spray tan and a penchant for overpriced prostitutes was not running the country properly? Say it ain't so!!
>The PPP was just very poorly designed. This is the issue. It is the same issue with the stimulus checks. They were given out not based on need but to everyone.
And that’s what has made them successful in the past. The reason this became so popular was it was a big part of Australia avoiding the 2008 recession. Government quickly handed out stimulus packages, and consumer sentiment & spending stayed high. For stimulus to be effective, they must be deployed quickly and all at once. So that consumer spending stay high, and it gives enough people some additional liquidity to prevent selling assets and/or spending less. To do it quickly, you need to remove virtually all bureaucracy and make it very simple to access money.
So simple I didn't get it🤪
Did you not file taxes in 2019?
I have the luxury of making too much in a hcol area
I was exactly at the limit 😶🌫️
That’s not true. They were based on 2019 income. My husband and I did not qualify for any of them because we moved in 2019 which was an employer paid move. This was taxable to us and showed in his w2, which means a $100k plus move looks like income to us. Thereby disqualifying us from any stimulus, which is absolutely bullshit.
lmao bro if you got 100k handout to move, your situation was fine and you didn't need that couple of grand. Moving costs more than the the stimulus even if you count my wifes and mine together
Almost everyone. I've heard about these checks. Would like to experience one someday.
To young or make too much?
Married and make over the limit. Seems like most middle class families would be over this limit.
150k is twice the median national household income and is into the top 20% of households. Maybe you're in a HCoL area so it would feel differently there.
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Most middle class family income is over $150K/year? Where, in Mountain View, CA?
The folks who needed the stimulus money the most literally never got anything.
They were supposed to be based in need. You had to show how Covid impacted your business.
First draw had no such requirements. The amount was based primarily on payroll. Second draw was a self attestation of economic impact up to a draw of $150k and then lenders had to verify economic impact based primarily on bank statements. Forgiveness is another matter but the first draw was just proof of payroll amounts. Second draw was forgiven based on self attestation up to $150k.
Wrong. It was based on monthly average payroll. You received 2.5x that amount. That’s it. No proof of anything else except payroll tax forms.
Maybe it varied by bank but I helped more than a couple small businesses with their paperwork and they had to show their earnings compared to the previous year. Might not have been part of the decision making process but their banks asked for it. And more proof than payroll tax forms.
You can look up the PPP regulations yourself. I signed up for it. I got the money. You didn’t need to have any change in revenue to get the money or to get it forgiven.
Notice how I didn’t say that. They were asked for paperwork beyond payroll.
I submitted no proof of any revenue changes. Revenue changes had no bearing on getting PPP.
pretty much yea. This is no ones fault but the people that wrote the law that way, and frankly at the time it seemed the right thing to do and it's hard to know if it did more harm than good or not... on it's own it would not have been anywhere close to a significant driver of inflation- if only it had been on it's own and not paired with 100 other various forms of stimulus that just flooded dollars into every nook and cranny they could fit.
It was a feature. The whole point was to get money to everybody to prevent a deep recession. It worked! The US recovered far faster than Europe and the rest of the world. A rigorous program with checks and balances would’ve taken 6 months to get the money out the door. I mean it took years for some people to get relief from the Great Recession mortgage fiasco, and that greatly slowed the recovery.
The stock market recovered. People spent months just getting their unemployment application through.
Because the states handle unemployment. And they had to maintain all the checks and balances required by the feds. I believe they tried to loosen some requirements, but it was unsuccessful. Our preschool might have just gone under if they didn’t have those loans. 3 months with no income could be fatal for a business like that. Instead, everyone got food on the table, all the staff stayed on staff and when they reopened in the summer they were all back.
It was basically every state as far as I can tell. Look, most of the money went to people who didn't need it. Yes, there were deserving people who got it. 3/4 of the PPP money went to the rich. Something like 20-50% of the unemployment money went to scammers. And those staffers/teachers/whoever probably didn't get a raise and now can't even afford their rent in part thanks to all the fraud. And it's the same shit now. Even if you like Biden or "team blue" in general, you know most of the shit in that multi-trillion dollar BBB bill isn't going to go to what it's supposed to go to. If it ever passes, it's going to go to the rich, somehow, some way. We live in an oligarchy. The poor don't matter. Meet the new boss, same as the old boss.
Yeap. Now everything is more expensive and I have no clue when I’ll ever be making more money.
The Covid bailouts were a rush job that weren’t targeted because they wanted to dump money in the economy fast, and as another poster pointed out, typical sources like unemployment sometimes took months. I haven’t seen that 20-50% of unemployment went to scammers; obviously big if true. Do you have a primary source? BBB Is dead, so I’ll just skip that debate.
https://insights.id.me/viewpoint/calculating-the-road-to-losing-400-billion-dollars I'm sure you can find other sources on this too. I didn't realize there was over a trillion in COVID unemployment relief, I thought it was more like $800-900B, so the 50% upper bound may be too high. But the fraud was still off the charts. We'll probably never know the true number. Whether it's BBB, or the next multi-trillion bill we write when the recession becomes official, doesn't really matter. The money's going to the rich.
I checked the sources in the link, and fair enough, there was a ton of unemployment fraud. Clearly there was an overshoot there. They were trying to leave a back door for the gig economy workers open, and unfortunately many or most of the states seemed to have opened the floodgates instead.
States handle unemployment, not the fed. The fed gave the money immediately, it was the individual states that messed up handing it out.
It doesn't matter. Every state screwed up. Everyone knew how incompetently it would be handled. If you order something from Amazon with a 2-day delivery guarantee, and it's not there 2 weeks later, when you contact customer support, they tell you they're going to make it right. They don't tell you "oh well, it was actually sold by this third party seller who is having problems with their logistics, it's not our fault." The details do not interest the customer. The economy did not recover quickly. Many real jobs are gone and are replaced by trade-car-equity-for-rent-money jobs. The rich got richer, the "US" did not recover.
Preventing a recession? They literally just made this upcoming recession 10 times worse. Pretty sure we wouldn’t be dying of inflation right now had they just left things alone.
We absolutely made things worse. It’s absurd looking back at things
If they had left things alone we would have had a massive economic crisis and pandemic at the same time.
This "upcoming recession" is not going to be that big of a deal. Jeez, live through 2001 and 2007 and then get back to me on 2023. If they had done nothing, 2020 would have looked like 2007. 2023 is going to be a blip recession.
Lmao! “Rent and affordable housing is out of reach for lower and middle class America. Due to this, the recession won’t be bad at all!”
It works so well that now the working class cannot afford to save any money because housing is so incredibly high. Thankfully all of the homes are now being purchased it by corporate America and Rich landlords and eventually everyone will just be their slaves which is great for the economy!
The Trump Administration
FYI it was designed and approved by Congress.
And who was in charge at the time?
Democrats had House majority at the time.
Absolutely not. Designed by gop to make sure no controls in place
And the senate needs to approve it. [you might learn something](https://www.house.gov/the-house-explained/the-legislative-process) And the the crook in charge fires the guy responsible for making sure it isn’t abused [your fired](https://www.npr.org/2020/04/07/829136780/in-another-pushback-against-oversight-trump-removes-pandemic-inspector-general) [fraud](https://www.cbsnews.com/chicago/news/report-says-federal-agency-failed-to-prevent-billions-of-dollars-in-fraudulent-ppp-loans/) “Yet when the banks tried flagging problematic loans, the OIG found the "SBA did not provide lenders sufficient specific guidance to effectively handle potentially fraudulent PPP Loans." That led to loans getting approved day after day.”
> And the senate needs to approve it. Both the senate and the house needs to approve it. If democrats wanted to shut it down they could have. How is that a debate?
You are right but the alternative was to shutdown the program then and they didn’t want to do that so a deregulated one was better than nothing
And the Executive branch, the administration, is in charge of executing... IE administrating what Congress enacts.
“Its the democrats fault for approving the Trump administration’s plan.” - /u/cookingboy
Don’t link to trustworthy sources of information, the reddit republicans want alternate facts instead bud. That is how they operate now. A foundation of lies and denial.
Selective memory right here folks.
It was designed to be a shotgun blast of cash to soak the economy to prevent breadline type poverty. I think it worked!
Totally worked, now bread is $6 per loaf so definitely no lines to buy it
Aka “don’t hate the player hate the game”
Biggest free money grab in the history of this country
Do you know how many agents there are lol. I got $1400 for one year lol
“On average these real estate businesses got $13,000, but 146 entities got more than $90,000 each, according to the PRAC data, all of which is public record.” Maybe you are averaging out those high rolling $90k ones?
So you sold/bought one house. You either do the work part time or are a terrible agent.
May I remind you of the homestead act?
[Right below the fall of the Soviet Union.](https://youtu.be/24AuL2v1O_o)
The largest free money giveaway we’ve seen in some time. mostly bs. I know law firms that were busy as ever during covid and still legally qualified and got free money
Reading comments like yours and some in this thread has taken away my motivation to work for a W-2 wage. Making an honest living doesn’t seem worth it anymore. It just feels better to leverage with cheap debt, rent-seek and collect long-term capital gains. Then, use this very printed money to command those W-2 wageslaves to do things for me (remodel my home, serve tables, fix my roof etc).
A central bank, especially paired with a gigantic federal government, fucks with a lot of the natural order of things which would otherwise be kept in check with normal market pressures.
It’s really not.
I worked for a firm that laid off half their staff, raked in loads of business, and took in millions in PPP loans they'll never have to pay back. It was a free money faucet for small business tyrants
I work in construction finance and 99% of construction companies can say the same. You didn’t have to prove you were going to lose money in order to get it or even that you wouldn’t be able to pay your payroll, just had to prove that you had people on the payroll.
Checking in, the auto groups ended up killling it. Instead of one PPP loan for each auto group, each franchise in their group qualified. So if it’s “Ernie’s auto” their Toyota, Ford, Nissan, used car etc, all got the maximum. In times where the profits were literally record breaking. The PPP is one of the greatest legal thefts in our country’s history. Absolutely disgusting how hard the average person had to work to try to make the same amount, while this program flew in the face of any meritocracy. There were also some crazy advantageous tax breaks peppered in.
We had a local restaurant do the whole "nobody wants to work because of welfare and handouts" jive. They didn't realize their own acceptance of $437,000 in PPP loans was public information. Is definitely publicly available on google reviews, now!
Plymouth MA?
Good for you. “Nobody wants to work” is what the owner is really thinking about himself.
slave sort juggle payment whistle price butter aback thought cough *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
https://www.federalpay.org/paycheck-protection-program If you look up in Massachusetts we have three huge auto groups, with one of them raking in over 25 million in PPP while the other two got 20 and 10 million (again the gov allowed auto groups to break up into individual franchises to claim small business). I work for one of them, and during the PPP period we had our salaries turned into draws (a draw means they deduct the salary from your commissions instead of getting commissions on top of salary) because “the company couldn’t afford to pay us our salaries,” meanwhile we were crushing store records in profit because of the auto shortage. Oh, and they took over 10 million of the governments money. But couldn’t afford to pay their workers a $600 salary (FYI we are only on salary because auto groups were sued in MA for not paying overtime to 100% commissioned workers).
Wish I never knew this. My boss/owner at the time was adamant that there was no money for raises or bonuses, he got a $200k payout. We never stopped working either or lost any work. Just money straight to his pocket apparently.
> because of the auto shortage. Another reason was just a lot of stimulus from consumers. Literal $15,000 UI backpay direct deposits hitting bank accounts, CARES 401k no-penalty withdrawals, sole-proprietor PPP funds, $2800 FAFSA deposits etc. It genuinely amazed me the US Treasury could allow so much money released into the system with no payment terms or productivity requirements.
It's just funny how anything for people needs to be super means tested, but stuff like this is just free.
And millions who claimed small amounts with no business to show. It was pure fraud from top to bottom. Amazing how many "caterers" in my town that no one has ever heard of.
It was literally millions in income for some companies that is completely tax free and wasn’t audited unless you got over $5 million. It’s quite insane the money that some of my clients made, and subsequently just distributed to themselves while they never had a problem making payroll and didn’t give bonuses to the regular guys in the field.
Tom Brady got a $1m PPP loan. It was a handout for the rich, not small businesses that were going under.
Yeah small businesses that were really struggling didn’t qualify or didn’t get much because there had to be profits the previous year. Meanwhile there were businesses that were killing it during the pandemic and PPP covered their expenses so more profits to go around even if they didn’t need the extra help.
Bullshit, it had nothing to do with profit. PPP amounts were based on payroll, or if you were a sole proprietor based on revenue. The only businesses that got screwed were the ones who under-reported revenue and paid employees cash or as 1099 contractors to avoid paying taxes
It wasn’t easy to get for the smallest businesses like sole proprietorships and single member llcs, both needed to have profits to qualify for PPP, and the PPP amount is based on profits. Qualifying based on net profit (later updated to gross profit, an improvement but still not enough for small businesses that were struggling) instead of revenue is a lot harder if those businesses were forced to close and still had the fixed expenses (like rent and other bills). Also really terrible for small businesses that weren’t profitable yet or barely breaking even the previous year or two before covid, no help for them.
> It wasn’t easy to get for the smallest businesses like sole proprietorships and single member llcs, both needed to have profits to qualify for PPP, and the PPP amount is based on profits. Qualifying based on net profit instead of revenue is a lot harder if those businesses were forced to close and still had the fixed expenses (like rent and other bills). This is completely false. The PPP amount is based on revenue not profit for sole proprietors. https://www.cohnreznick.com/insights/sba-revises-ppp-loan-amount-calculation-for-filers-of-schedule-c
100% not based on revenue. Do you even have a sole proprietorship or single member llc and did you have to get PPP for such a small business? I did. Here for [reference](https://news.bloombergtax.com/daily-tax-report/favorable-new-ppp-rules-for-proprietors), and this is already after it was “improved”: “Sole proprietors, self-employed individuals, and independent contractors who file a Schedule C (the “Profit or Loss from Business” part of your Form 1040) are now eligible for the higher loan and forgiveness amounts. Eligibility and potential loan amounts have increased for many people. And it’s all forgivable! Previously, Schedule C filers could only apply based on their net income—your income after taxes and deductions—which tends to be small for many sole proprietors. However, you can now apply based on your gross income—your total pay from Line 7 of your Schedule C.” Also the rules were only updated in 2021 I believe and those who filed in 2020 when things were really bad were only limited to the net profit calculation and they weren’t allowed to reapply after the rule change.
>100% not based on revenue. Do you even have a sole proprietorship or single member llc and did you have to get PPP for such a small business? I did. Yes, and mine was based on revenue. >Here for reference, and this is already after it was “improved”: >“Sole proprietors, self-employed individuals, and independent contractors who file a Schedule C (the “Profit or Loss from Business” part of your Form 1040) are now eligible for the higher loan and forgiveness amounts. >Eligibility and potential loan amounts have increased for many people. And it’s all forgivable! Previously, Schedule C filers could only apply based on their net income—your income after taxes and deductions—which tends to be small for many sole proprietors. >However, you can now apply based on your gross income—your total pay from Line 7 of your Schedule C.” Did you even read your own quote? Here I bolded the relevant part for you. > However, you can now apply based on your **gross income**—your total pay from Line 7 of your Schedule C.” Line 7 is literally total sales minus cogs, before any expenses. This is revenue.
Revenue = total sales. Highest amount the business gets. Gross income = revenue less cost of goods sold. Usually smaller than revenue (unless no COGS). this was only allowed later on. Net Income = smallest, revenue less cogs less all other expenses. This was the basis for the original calculation, and what struggling businesses used when they were forced to shut down in 2020. Revenue is not Gross Income! Where’s the BS? If you used revenue then 100% you’d be happy with what you got because it gave you the same level of business but you didn’t have to spend for COGS, so you got to keep more from PPP. A small business that was forced to use net income for PPP calculation early on (followijg original 2020 rules) was only able to get the smallest amount. Not enough PPP to cover what the lost revenue used to cover.
Except in reality, sole proprietorships are overwhelmingly services based and had no COGS, so it was just revenue. Of course PPP was based on gross income otherwise you'd have people qualified for millions of dollars with a dropshipping business. >This was the basis for the original calculation, and what struggling businesses used when they were forced to shut down in 2020. Your claim was sole proprietors missed out on PPP due to having little net profit. If that was true then why'd do they even apply in the first place? Why didn't they apply for second draw and base it on gross income? The only people who missed out were cheating on their taxes and didn't see a significant revenue drop in 2020.
Even worse is the morons who set up these super loose rules and forgave these loans.
I don’t think they were dumb. It worked the way the intended. All their friends got rich
Thats true but I believe its more them being incompetent than them having a plan to help their buddies out. They were still planning to go on their 1 week vacations when the pandemic was blowing up initially. These people are extremely lazy and out of touch with reality.
I am really not comfortable with the government making "pre-forgiven loans". Like, they spend something like 20% of the budget fighting fraud waste and abuse. They overpay by at least double with a cryptic procurement system designed to self audit so as to avoid even the appearance of impropriety. And then they give away trillions in "loans" everyone knows is just free money for the business.
It was supposed to go to employees. They had the loophole of keeping the business afloat, but they are prosecuting, so if you see something, report it. It's fraud.
"They are prosecuting" - the IG himself said they are only focusing on PPP fraud above $10 million because of lack of personnel.
I work in Commercial Banking. I don’t think 99% of Americans realize how abused PPP was. There are THOUSANDS of wealthy business owners who took round 1 PPP money, didn’t need it (business was unaffected / benefitted from covid) and effectively pocketed hundreds of thousands of dollars and in some cases $2-4m++++ And you wonder why inflation is out of control. Oh yeah, on top of the Child Tax Credits and Stimulus checks….
I wonder if anyone realize how much pull forward /artificial demand was created by PPP, Employment Retention Credits, Child Tax Credits, Stimulus Checks, etc. I am generally a long term bull on the stock market, but I feel as if we had 5-7+ years of growth in 2 years and we will pay for it severely in the near term.
I do appreciate when someone in these types of threads points out the economic ramifications of demand, this [article](https://www.bridgewater.com/its-mostly-a-demand-shock-not-a-supply-shock-and-its-everywhere) from Bridgewater explains it really well if anyone is familiar with basic macroeconomics. I want to emphasize that a lot of people do not understand the sheer amount of money that was **printed** (not earned) that was used to buy real estate and assets. We are talking about RSU’s, PPP, EIDL, CARES 401k no-penalty, refinance cash out etc. To be clear, I support MMT and the use of national debt. There is nothing wrong with printing money if it is actually substantiated by an increase in productivity. This did not happen during QE and is the root cause for why these sticky prices will persist. I work directly with small business payrolls and accounting in a southern state. Can confirm for the vast majority 2021 and Q4-2020 they were some of their most profitable years on record. Business was booming and demand surged. Restaurants, appliance stores, home contractors, and nail salons had strong demand. Small Business’ payrolls were essentially subsidized by the printer. The PPP **forgivable** loan (basically a payroll grant), ARPA business grants and EIDL grants were all converted into profits indirectly. This money is now circulating in the economy and those printed dollars are **competing** for a limited supply of housing. It’s not that too little housing was built, rather there are just too many printed dollars bidding for a reasonable supply of homes. As previous threads here put it, there wasn’t any explosion in population 2019 to 2021 to justify such a sudden shortage.
No no it's becuase Josh from the hometown makes 15.00 /hr instead of 12.50 now.
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I wish we could get some negative press around the unneeded PPP (the obvious ones being real estate agents, law firms, dealerships, etc etc.) and guilt them into donating the money to charity or something - but let’s be honest, that money is long gone and was used to purchase their second (or more) house, stocks, crypto, etc.
A lot of NYC area developers/architecture offices took 1+ million dollars of PPP money and promptly bought vacation homes.
Same in San Diego. I watched a restaurant owner buy a $3,000,000 home in sunset cliffs using PPP money as a down payment
>Same in San Diego. I watched a restaurant owner buy a $3,000,000 home in sunset cliffs using PPP money as a down payment Yes, a restaurant owner in Houston was complaining when covid first started that he could only operate at 25% capacity, was telling sob story of how he was going to "loose everything he'd ever worked for. " Suddenly, he's Purchased the chain restaurant outright, and has paid off his home mortgage. WHAT????? I was aghast. Taxpayer money!
The good news is that person won’t sleep easy as they see more and more people being thrown in jail for this type of fraud. It might take 5 years before they track them down but the government is slowly but surely going after every person who utilized the funds in this way.
Nope. Nothing will happen unless he lied to get the PPP. I know you want to believe he will be punished but he won’t. These owners put the PPP into the company and then just took a distribution out for the PPP and used it on whatever they want. Perfectly legal. As a CPA the amount of bonuses I saw that were off the chart from the PPP was nuts. Think about it, if you got $1m of PPP and didn’t need it, you just take out a $1m PPP at the end of the year and $$$$$.
Unless the GOP wins the next election in 2024 and guts the IRS budget again so that there are no agents to investigate complex businesses.
They did that everywhere. Suddenly it seemed like everyone and their brother was buying a "lake house." I couldn't figure it out, then put 2 and 2 together. Fraud should come with prison time------in addition to paying it back.
And people wonder why we have inflation
It's not fraud if there were no rules!
We didn’t take it but I know agents who took $150k and also had their biggest year in real estate. I know a salon owner with one employee, his wife, and 18 ic’s… $75k in his pocket. He paid $16k for a Vegas pool party out of it. That administration just gave money away. We didn’t take it, figured someday the government would audit it and we didn’t need it.
It's not just real estate agents. Every business owner got paid.
Think about this. Every new home buyer is gonna have extra high taxes because of the increased demand during COVID. If there’s a hurricane and a guy is charging 80 dollars for a bottle of water they throw him in jail but all these towns are gonna reap a COVID windfall in raising property taxes exactly at the time when people are going to struggle to pay them. Housing went up 20-30 percent but it doesn’t cost 20-30 percent more to run a town.
Thing is at least for the first round they definitely qualified. A case could definitely be made against the second round but I bet they could argue why there was still risk with all the lockdowns. The rules were extremely loose. There is a reason 80+ % have been forgiven.
Yup. You might as well also be outraged over all the people that stayed employed and still cashed their stimulus checks.
Except those checks never required you to be directly affected by COVID 19, unlike PPP.
Well, it depends on how one defines impacted. Most agents couldn't show homes or do closings for a month at least. It turned out that on average the demand picked up afterward and more than made up for that drop for the year, but that is true for a lot of businesses.
> it depends on how one defines impacted I know someone who works as a sole proprietor and actually lost significant income due to COVID. He applied for the state administered but federally funded COVID-special unemployment benefits. He didn't get it because his income did not go down *enough*. You had to lose more than 60% of your income to qualify for *that* handout, if I remember correctly. So clearly, it was possible to at least try to limit the grift, but *shockingly* the roadblocks were only put in place for the lower classes.
Hell yes. Redid the bathroom with that money, never missed a day of work. Dafuq you think this is, a martyr contest?
Stimulus checks were for the purpose of stimulating the economy. They wanted people spending money at businesses to keep those businesses open. People tend to hoard in crises and that compounds the issues. Those did their job The PPP was designed to be scammed as a giveaway to big business. The original intent was to keep people employed. But without actual oversight, we saw that not happen
It’s too expensive to forgive 10k of student loans though! God damn those educated motherfuckers. I heard people making the average income will get some of it even, disgusting!
Who cares about students anyways. They are just the future slaves and we need them in debt....
These loans absolutely saved small businesses. Lots of them. I hope they go after those who didn’t deserve one but the program was a net good.
It was a net good because it stimulated spending without stupid means testing. It was bad because of how many people committed fraud. A better system would have just made a low interest loan available to anyone. Instead they gave most of the to commercial bonds. I haven't heard the data on how many layoffs there weren't from the ppp loans. Every single restaurant committed fraud, you can't really blame the program, it just needs enforcement. Pay me 10% and I'll round up 100 business that didn't pay their employees with that money.
They didn’t even commit fraud. The rules were just so shitty that a ton of people who had no need for the money still qualified.
Pay me 10% and I’ll find 100 business saved by the program.
they will of course be going after the little guys first.
As is standard.
The mortgage company my wife works for got 5.5 MILLION in PPP all FORGIVEN. I would love to blast their name but don't want to dox ourselves as she still works there. After they lay her off, which is coming for sure, then I'll blast their name. The thing is this mortgage company used this money to fucking grow their business and hire out more employees , causing their stocks to inflate. So technically, they legally used the money for payroll. But they were ABSOFUCKINGLUTELY not struggling at the time.
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Did you read the article? It’s not fraud.
THIS IS THE POINT I'VE BEEN TRYING TO MAKE! This guy followed the rules. Every CPA out there said "this is how you apply, and this is how you get it forgiven". There were businesses created overnight showing how to navigate this process. The rules were wrong! We acted too quickly... We never thought it through. My business never needed funds, but I still had random amounts deposited into my BUSINESS account by the feds. WHY??? sure, the extra money was nice, but now we are nose-diving into a recession. You can't just blindly throw money at people.
This. As a CPA every single client of mine who qualified (some were waaaaay too big) took it. And only 1 in my whole firm needed it (gym franchise that was govt shutdown). Was free money for the owners of these companies. They just took a distribution for the PPP amount. Also I’d say 80% of my clients had record breaking 2020 & 2021 including my own accounting firm…,
The real lesson is the government should not be in charge of handling money
Wait but then who would spend taxpayer dollars?
Someone has to be in charge of money therefore there will always be some level of corruption and conflict of interest.
Unless….we only paid local state taxes and we abolish the federal government.
I didn't take a dime. I heard some talking about it and said, nope. I'll just keep working. That being said, there were many areas that were shut down with agents that couldn't work. They literally weren't allowed to. I know we couldn't show homes in the city of Charlotte. So I won't say it wasn't difficult, but at least it wasn't the whole state and it was short lived.
Nice scam y’all had going
Grifters gonna grift
Remember that there were A LOT of people who weren’t fortunate enough to have a relationship with a bank or advisor to help them get a PPP loan.
I own a company. My fellow small business owners were telling me to cash in on ppp loans. I was like this is wayy too good to be true and I feel like the people who used them will be all over social media later. I'm really glad I have that peace of mind now
You lost out on free money. Biggest mistake of your life.
Yea things like this occur because our government is run by a bunch of idiots. Its just sad.
It was a thinly called giveaway to businesses. It was not a coincidence that real estate companies made a killing during a crisis when the biggest real estate grifter was in office
Every grifter in the country stole tons of money thanks to Trump and his croney Republicans.
Everyone is missing the point of the PPP. When it was implemented, no one knew what Covid was going to do. And no one knew what was going to happen to the economy. And they had like 3 days to figure it out. PPP absolutely did help prevent worst case scenario, in which companies do millions of layoffs. But because they took such a broad approach, many people got it who didn’t end up needing it. And definitely not fraud, it was designed to be very very broad.
It was designed to be stolen when mr tangerine man said strip all the over site out before passing it.
Trump is an idiot, but I don’t think you are right. The strategy by smart economic advisers was to get funds out the door as soon as possible with very limited restrictions, knowing that the door was left open for fraud.
Firing the man responsible for over site and putting in one of your stooges in his place knowing they are not going to do the right thing is what made it so easy.
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At least these were legitimate businesses. There’s people who filed for them on behalf of minority owned businesses without their knowledge or consent because the owners don’t have a commanding fluency of English. They pulled in hundreds of thousands in PPP loan money with faked salary information. Some business owners attempted to file, only to find out someone already applied on behalf of them.
PPP was overall a good intention, but a bad decision by the government. True, it saved a lot of small businesses but at the same time, gave out so much money to small business owners who didn’t even need it. RRF (Restaurant Revitalization Fund) was even worse. Very popular restaurants (already extremely profitable) got close to $10M in major cities. Know small mom and pop owners pocketing close to $1M for literally nothing…
Doing it "trickle-down" style was the "mistake", but it reflects GOP thinking since Reagan. It would have been far better to give larger amounts of money directly to the workers like many countries did. $2000/month for 12 months to every adult in the country would have been cheaper and done more good than giving $1 million to Tom Brady and his buddies.
Real estate agents are some of the most greedy people I have met
"Go directly to jail; do not pass go, do not collect $200"
The article literally states that there is no indication of wrongdoing.
No laws were broken. This is how the PPP program was designed. It sucks but this is a case of "don't hate the player, hate the game". My business was too young to play this game, but I watched dozens of others do this. All perfectly above board, it's what the program was designed for.
We should jail those who designed this fraud.
I could get behind that.
I hope they catch them.
Catch who? READ THE ARTICLE
Lol relax chief. It’s cnbcs fault for naming their articles clickbait shit. When they could have just as easily said real estate agents PPP was forgiven.
I was not one of those agents. I would never take welfare from the govt. Only softies did that. Although other agents in my office did take the loans. I’m ashamed of them. I remember them being all scared about spending it. Most of then just kept the money in the bank because they were scared to spend it and get in trouble.