Small Business, Fraud, Jay Right discussed on The Small Business Radio Show
Because someone asked me you know. How would you rate the government response for Small Business? I said well you know. It's a for effort really F for execution. Because I can't imagine them wanting to distribute this through banks. I mean. Think about it when you get a bank in between a small business and their money. What could go wrong with Jay Right? I mean this was in my opinion the wrong way to do it and I know it happened this way because they felt well. Banks have relationships with small businesses. We can get some money this way but I thought it was. You have people competing with each other trying to get a loan. Yes yes. That's that definitely was an issue over. Yeah I agree with you that the intent was good and I also think that the government moved quick And credit to them on that but I think what happened is they have to find it. Channel can dispose. That's Ju- in the same way that even if you look at the Fed the Fed is doing all kinds of things today that would would have been considered impossible like buying corporate corporate bonds and Iris Bonds and Sawn and ECON directly in markets and the decade near to create a special focus vehicle to do that just simply to be within the limits of the law so in this case the government decided that he. I'm going to dispute these lawns and use a vehicle. That already exists which backs. So maybe that wasn't too bad in southeast implementation of that so as you pointed out once you get once it gets down to the wire. The banks are actually going to focus on relationship. They're going to focus on the people that they will put some. That's exactly what happened to you this. I I have a friend who runs a small business in us in Austin Texas owned several things just watching what happened to him. He went to the bank and he was gone done because he wasn't accustomed to the basket. He goes to approach and the backs. Mundy's going to customers. I wind up going to probably the larger the relationship with which is against what we think to do. That's the first thing that won't work. Second thing banks stepped up with processes that Green Batteries for London. Exactly where we need to be removed. Exactly Yeah so. Tell me what you needed to use. The bag says the channel vehicle to do. This was a certain amount of education that needed to get out to that. This is how we're to approach this time and this is how you need to change the processes so I I agree with you. Intend was right navy's on things could have been improving the execution in my opinion banks designed to manage their risk and not to give money quickly and this was designed as a self certifying program where all he had to do was submit your nine forty nine forty one tax payroll tax and you get the money but then the bank saw that well. Maybe we have some riskier because if there's some fraud it's GonNa come back on us. And so they got nervous. And so they started requiring more things reduce their risk like they always do. Yeah it's it's interesting. Vj because it seems that in a sense however this program is kind of making small business owners into unemployment agencies employment agencies because the money's going to go towards making sure they keep these people employed. Why couldn't we use what they use in some European models where they're just paying seventy five percent of someone's compensation up to a certain amount then we wouldn't have to use small businesses employment agency I agree with that in committee to look at this whole thing is to understand Wha what what is used as a small business face at this time the teetering between liquid illiquidity and insolvency right. And what are the issues that businesses have today? Let's think of their obligations was employee. That's an appointment. The second one is obligations. Which is things like mortgage or rent those two those are the two big ones on? Of course it operational cash flow. So what would have made sense was to approach the banks package that included all trip so basically and even let the Saudi approach small businesses and that would be important for small businesses to even notice for example using my my my friends. Business example get He wasn't even aware of the of the F. Cra Act you know the families. I grow response. Act which which allows co payment to employers allows It takes a lot of young players to get twelve weeks of payment. So now he is working with Partial Information Ritchie. Knows about me he doesn't know about this other About the of. Cra didn't know about the ideal. So if if this had been approached at a program for the businesses that told okay. Here's what you need with. The employees regular backstop employs okay. We're going to back. So how are we GONNA do it? May which one we actually pay them to. Sierra is famed. That's an example of a adhesive comes back. The money comes back from the from the government number two. We'll suspend some new ideas you talked about unions. Don't pay us. Don't nuclear attacked us. That's about cooking. Businesses bright don't pay payroll taxes on on these employees so we take care of employees. Pick a second part which is Reaches the big insolvency issues mortgage and loans. We're going to tell lenders. And landlords to basically call Timeout College. Time out three months and you these obligations are not use it. It's just not do for the speed of payments and non so that takes out the issue of that address the second big issue then it allows businesses to focus on the operational side effects. What do I need to supply so do I need to do to keep this business? Select maybe I need to invest in online capabilities right now. Maybe you need to put up a website quickly. So I don't lose all the business and the customers already have so then it allows them to focus on the third part which is getting cash Louis to the business and what he lets about the foot. Which is solvency and keeping the employees? This could have been built together as a as a as a package with treat with a three legged stool and when they approach the bank or Sba a web it has to get that brought by advice of the elements of Your Business Options each of them. This is what you can do. That would have helped businesses. Get a grasp of the problem and realize where they could actually spend the money and it's got to be easy and it's got to be automatic and I love what you said that now small businesses in the. Us are so focused on their cashflow. Should they keep their employees shouldn't they? Are they going to get the PC? Aren't they are not spending their energy trying to reimagined there or investing in Areas? That really could help them term executive. Exactly that is exactly right. Because it's so Bible now right so the anticipation should be. You're going to spend all the money to get the how to keep you. Keep your get his at bay and all your credit and you and you have to. You don't have the time to be mental model of the business. People are not visiting anymore. What else can you? So that's the part that. What tools could you use? You might be a small retail company. Might be a design shops. You might be an architectural firm. You have to invest in tools now to make sure that people who are you suggesting customers can walk as a with as minimal amount of disruption as possible and you can continue to go to the service. There's no time to do that because the survival amount so the European what is the barrier for the US implementing Canadian or European model. Where we're just going to pay X. percent of someone's compensation is that historically Americans have some. There's something wrong with feeling like we're giving something for nothing. I think politically. I think there might be a hard one to do. Simply because of the mindset that this that this would become government taking over private sector or all that this is going to become a handout which might explain some of the things we see in some of the measures we seen the current. Take the current date which keep the employees or you do not or you can use this. Only you can use this money to pay supply as an example that is going to be fraud in the cement. I don't think we can't afford them. And maybe some of this stuff pro. It could be like museum here. We talked about this. Some of the companies got the goalie. So that could have intending not be plugged. That may just could have been added a better planning.