CHAPEL HILL – It’s now fallen on the Small Business Administration (SBA) to dole out roughly $350 billion passed by Congress for small business loans in the face of the coronavirus crisis.
But some economic experts wonder if they’re up to the task.
“The SBA does not have a good track record of pushing out loans,” said Mary Moore Hamrick, chief public policy officer for Washington-DC based Grant Thornton, in a press briefing call via teleconference on Tuesday.
“They’re not known for that in an efficient manner.”
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A panel of experts joined the call organized by the UNC Kenan-Flagler Business School and its affiliated Kenan Institute of Private Enterprise, which have been holding weekly briefings since the crisis erupted.
Hamrick also emphasized the enormity of the task at hand.
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“The size of this deal is the equivalent of three times their annual deal flow that they have to push out in two months in an effective manner.”
Hamrick said it’s important for banks to step up to help administer these loans.
“Treasury Secretary Steven Mnuchin has said that he hopes to certify as many banks as possible by the end of this week,” she said.
Ultimately, she said, it comes down to one question: Do we have the infrastructure put in place to provide the much-needed the lifeblood of capital to small businesses?”
That is still yet to be determined. However, UNC Kenan-Flagler Business School Professor Paige Ouimet said it will be critical to the health of the economy and workers’ long-term prospects.
“We know low wage workers tend to see greater dips in their earnings following job losses during recessions, and this can primarily be explained that these workers have very low bargaining power when they’re looking for new jobs coming out of a recession,” she said.
“So again, this gets to this point that the more jobs we can support, the more economic opportunities there are for laid off workers to find coming out of the recession will help reduce the economic costs borne by individuals who haven’t been laid off.”
More SBA related coverage from TechWire