[xvedejas]

Just a thought: when the government starts giving out lots of money with strings attached, you get a lot more jobs doing administrative compliance tasks. I'm thinking of, for instance, universities and the growing numbers of administrators who exist to chase funding. More strings attached means money will go towards meeting all requirements. Maybe this isn't strictly bad, but it might be less efficient than just letting some undeserving companies get away with extra cash. I'd rather startups consist of employees focused on building their product than focused on qualifying for government grants.

[drsooch]

Just as an aside, compliance (at least in the case of the SBA ) is done at loan approval time. Compliance for the SBA mirrors what most traditional lenders require: insurance, permits, etc.

It's also hard to extend what the government is doing now (payroll protection) to a university or some other large firm. Funding for those type of entities has been around for a long time and is set in stone.

[xvedejas]

And that's not to mention compliance enforcement required on the government's side, which I imagine isn't so easily scaled up at a moment's notice.

[drsooch]

Compliance in this case won't be that big of a deal. The fact of the matter is it will be relatively simple for a small business to show that the money from the program has been a benefit to them. The way the SBA program works is the intermediary lender is required to gather all the necessary documents for submission to the SBA.

The sheer quantity of loans is the only bottleneck. Even that would probably be add minor stress to their system. A regular loan can take a week to two weeks to process when things are running smoothly. Most of that time is the loan sitting in a queue waiting to be processed. The actual enforcement requirements will be relatively unchanged compared to regular loans.

From my understanding the actual compliance of whether the loan will be forgiven or not is straightforward and probably wont need to be enforced until a few months down the road. If it does not comply, the company will pay back in full.