The Tangled Webs People Created for Themselves Around The CARES Act

The Tangled Webs People Created For Themselves Around The Cares Act - Gettyimages 57012456 516463

When Covid-19 took the country by storm back in March of 2020, the U.S. Government had just one mechanism even remotely capable of handling millions of small businesses that needed to borrow at once.

The same one they used to handle actual big storms. 

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, an offshoot of The Small Business Administration’s long-standing Economic Injury Disaster Loan Program (EIDL), saved a lot of honest and well-designed businesses from failing via low-interest, long-term loans.

But it also invited abuses, especially as its limits ballooned from $200,000 to $2 million. Rather than using it to operate, expand and stabilize their companies, unscrupulous entrepreneurs used the low-interest (3.75%), 30-year loans to pay off mortgages, buy second homes, boats, even, in one case, put a down payment on a jet.

It was easy to see the temptation. EIDL was designed to address crisis in a small microcosmic space, not stave off an economic collapse due…

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This article was written by Ami Kassar and originally published on www.inc.com