NEW $250 BILLION STIMULUS - MORE FREE MONEY ANNOUNCED

What's up guys, it's Graham here. So, do you remember the good old days when the only drama we had to report on was the friendly competitive feud between the stock trading brokerages Robin Hood and Charles Schwab? You know, the mild back-and-forth banter between two secret stock market lovers who each tried to one-up each other. And then we ended with all of that slowly vanishing and ending up into the abyss to be forgotten. Ah, those were the days!

Because the financial drama that we're getting right now is a lot more severe, as it impacts the lives of millions. And that would be this whole free money debacle that does nothing but confuse and frustrate pretty much everybody involved. And today, this whole saga just dropped to an entirely new level! That's because who would have thought that if you want free money and you only offer enough free money for one out of every 50 small businesses, that you're probably gonna run out of said free money very quickly? And that's kind of what happened here.

Within days of being released, the small business loan program, otherwise known as the Payment Protection Plan, which pledged three hundred and forty-nine billion dollars worth of forgivable loans for employers to retain their employees, saw one hundred and seventy-eight thousand applications. That meant very quickly that the money was drying up, and there would not be enough left over for everyone who needs assistance.

For anyone unfamiliar with how this works, it's a loan program available for small businesses with under five hundred employees to retain their workers during a time where otherwise they would have to let them go. This loan is given to businesses in the amount of two and a half times of their monthly payroll cost, up to ten million dollars. As long as 75% of that money goes towards qualified expenses, meaning like they're actually maintaining their payroll like promised, the loan would be forgiven, meaning it does not need to be paid back. And that's where the term "free money" comes in.

That's caused pretty much any sensible business who's been affected by this illness to go down to their local bank the day this becomes available, file the appropriate paperwork, and try to get two and a half months of their payroll expenses covered for absolutely free. And guess what? Any small business with under five hundred employees is eligible! Even myself, I could go down to the bank today as someone who runs their own S corporation and basically just employs myself. I could go and get a loan for two and a half months of my own salary, and as long as I give that money to myself and keep myself employed, I could keep it for free.

Don't worry, I'm not actually doing this. I would rather the money go to someone else in need instead of me clogging up the system with another application. But due to the free nature of this money and just how many people run small businesses—which, by the way, is fifty-three million people in the United States for anyone who's curious—it's no wonder that there was such a flurry of people going and signing up for this. Because one, there's pretty much no downside to this, and two, so many businesses have been negatively affected lately that for the amount of time it takes to basically just go and apply to get two and a half months of your payroll covered, it's basically a no-brainer.

So, given how much demand there was for this program, it became very evident very quickly that, wait a second, there might not be enough money to go around. And now the Treasury is asking for more money, more specifically two hundred and fifty billion dollars more. First, we should talk about why this is being implemented in the first place, and that answer is twofold. One, the goal is to make sure businesses stay afloat, they keep their payroll covered, and that, in turn, helps put more money back into the employees' pockets and then from there back into the economy. Imagine it kind of like a doctor trying to keep a heart alive so that the patient can live.

If the heart doesn't work, then the person dies. Well, the same thing kind of applies here, except the heart is the business and the person is the employee. Without the business, the employee is out of work and is not bringing in more money to the economy or paying their fair share of payroll tax. So, by keeping businesses going, the employee is gonna have a steady paycheck at least for the next two and a half months.

Now, it doesn't actually matter if the employee is doing any work during this time. After all, if the business is shut down and can't operate, it doesn't make sense for the employee just to go there and sit around all day. So, this forgivable loan is just meant to keep employees on payroll, even if they're not going in day to day.

Second, you might now wonder: why do this even if the employees are not gonna be working? Well, the answer is, besides giving employees enough money to stay afloat themselves, they're also connected to their employer. I think it's safe to say if this loan program is expected to last two and a half months, that's probably about how long they would expect the shutdown to last or how long it would take for things to slowly start beginning to return to normal. Maybe. Okay, it was just a guess, but I think it's a reasonable guess given how specific two and a half months is.

So by keeping an employer connected to their employee, it helps ensure that after all of this dust settles, hopefully the employee has a job to return to when all of this is over. And that, in turn, keeps morale high and should help our recovery just a little bit faster.

Now, you might be asking yourself: why would the Treasury give businesses free money when instead they could just pay people to go on unemployment? And that's a great question that I just asked myself. So, let me go and answer myself right after, of course, I smash the like button through the YouTube algorithm! If you have not done that already, it greatly helps up my channel. So if you appreciate content like this and you enjoy videos like this, if you wouldn't mind, it takes just one second. Thank you so much! And let's begin answering myself.

Well, let's answer that in the context of this illness going around. If you were fired or your company closed down due to the word I cannot say here on YouTube, then most likely you would qualify for unemployment along with ten million other Americans. So here is how that works. Even though every state is going to be different, on average, unemployment is available for 26 weeks. Here in California, the base unemployment pay is up to half of your paycheck, capped at four hundred and fifty dollars a week, with a six hundred dollar a week bonus for up to four months due to the illness or until the end of July.

That means here in California, unemployment could pay you up to forty-two hundred dollars per month for the first four months and then an additional $1,800 a month for the following two and a half months. So that means in certain situations, in theory, unemployment would end up paying you more money than if you were actually working. However, if you're making over forty-two hundred dollars a month working as it is, then yes, your employer keeping you on payroll with the help of this free loan would indeed benefit you more financially.

And that also helps the company you work for keep you retained. But given those numbers, you might want to take a look at this further depending on how you've been affected by all of this. Because I'm sure for many, they're actually now making more money from unemployment than they were from working. Which, I mean, is not exactly a fair scenario for people who have to continue working through all of this and make less money than they would have otherwise claiming unemployment and not working. But this is not a topic I'm gonna come close to touching here on YouTube; it just is the way it is.

So, anyway, here is where we are now: three hundred and sixty-nine billion dollars has been pledged for small businesses. And because of such high demand and the frenzy of all of these businesses applying, they need more money—another two hundred and fifty billion dollars. However, the more I'm looking into this, the more of a complete mess this is looking like, and I don't know where to begin.

I guess the first would be Wells Fargo, who is no stranger to controversy. Not only have they been one of my worst-ranked banks in my videos about the worst-ranked banks, but in 2016, they had quite a massive scandal for creating over one and a half million fake deposit accounts and five hundred thousand fake credit cards—all in customers' names without their permission. And of course, they were found guilty and fined one hundred and forty-two million dollars. But it wasn't over yet because they were initially only caught for one and a half million accounts and later they actually admitted that there might have been more fake accounts than were initially let on, more like three and a half million instead.

Oh well, just a whoopsie, could have happened to anyone! But of course, it's not over yet because a year later, in 2018, they were hit with a one billion dollar fine for charging people with car loans for insurance without their knowledge—even if they had insurance. They were also found responsible for charging customers to extend their rate locks when the reason for the extension was the fault of Wells Fargo. Then weeks later after that, another fine was finalized for 2.1 billion dollars for misleading investors about misrepresented mortgages during the 2008 housing bubble.

And now, Wells Fargo was back at it with the Paycheck Protection Program loan because they initially had to limit the total amount of their SBA loan applications to ten billion dollars. Needless to say, a lot of businesses were upset to get turned down by this because they've had business relationships with Wells Fargo in the past, and they were not able to secure their own loan through the bank because of that ten billion dollar cap. So many businesses had to scramble and try to go somewhere else for fear of being left out.

Of course, this was not by the choice of Wells Fargo because after being caught creating millions of fake accounts, the Federal Reserve put an asset cap on how many assets the bank could have under management, and that cap was one point nine five trillion dollars. So just guess how much they already had under management by the time the SBA loan program came out. Well, if you guessed one point nine three trillion dollars, you would be right!

So, Wells Fargo had to put a cap on their lending program because otherwise if they went over, they would be in violation. Thankfully though, just recently, the Federal Reserve has lifted the asset cap temporarily for them to issue small business loans. So if you're a Wells Fargo customer and have previously been denied because of this, then good news! You can now go back to Wells Fargo and it looks as though pretty soon you'll be able to get your small business loan through them.

As for whether or not Wells Fargo is going to make any money originating these loans, the answer is going to be no. Part of the cream any proceeds are gonna have to be returned to the Treasury or to a nonprofit agency. So, it's really in Wells Fargo's hands at this point if they decide to originate loans or not; but now they can!

In addition to that, it appears as though still the vast majority of businesses who have applied for this loan have been just left in limbo, with absolutely no clue what's going on or any timeframe as to when they're gonna be receiving their money. So in order to relieve some of these concerns and offer money to people who were promised it within three days but then got nothing, they've expanded on yet another loan program known as the SBA Express Bridge Loan. That's right, I kid you not: they've expanded short-term lending!

So that while you wait for your other short-term expedited loan to come through—which should have been three days—you could just take out another loan that should be in theory processed faster and take out up to $25,000. You do see the irony in that, right? To me, it's kind of like they're saying, "Hey guys, go and apply for free money at your bank! We're gonna be giving you, for free, two and a half times your monthly payroll cost! And then anything you want over that, we got you covered! We'll give you really good rates and a really good term. Don't worry, you'll have that within three days!"

But if that loan takes too long to process since we're so backed up, here's another loan you could get instead until we figure out the first one. So just go and apply for this loan over here, and then by the time the first one comes through, you should hopefully be covered. I don't know; I think that's what they said. I just can't help but feel like the solution of going and applying for a second loan just defeats the purpose of the original one in the first place.

But for anyone who wants to maybe go and look into it, there you go! Gotta say, given how quickly this was rushed out, it's kind of no surprise that they're worried about running out of money and need to ask for another two hundred and fifty billion dollars. After all, it's probably a better idea to have a surplus of too much funding, so it's not too worried businesses about a lack of funding.

However, instead of just throwing more money at the problem, you'd think it would be a much better idea just to use those exact same resources to help get the money to the businesses in the first place in a timely manner. Let's say in the next five to seven days maximum! After all, what good is another two hundred and fifty billion dollars if no one is getting it, or if there's so much confusion around that no one knows exactly how much or when they're going to be receiving anything?

Although even then, it's still concerning that the vast majority of people who have applied for this have still not received anything at all. So for anyone wanting an update on the Economic Injury Disaster Loan or the two and a half months of their payroll protection program, there you go! The good news is that it looks as though they'll continue to fund the program with an additional two hundred and fifty billion dollars to make sure there's enough to go around for everyone.

And Wells Fargo is hopefully gonna be accepting applications again, although who knows when you'll actually get the money! Now, for whatever my opinion is worth—which is basically one like on the video, if you haven't hit the like button already—I think it's more important that they figure out a simple, streamlined, straightforward process for people to get access to their money with a 72-hour turnaround time than it is to give another two hundred and fifty billion dollars that no one can seem to get access to.

It's better that they just fix the problems right now than throw more money into something that's obviously not working. I also think it's totally okay to prioritize the businesses that need it the most first, rather than a first-come, first-served basis, which really does nothing but create a wild feeding frenzy for free money. But there should theoretically be a way to calculate how badly a business needs its money based on the number of employees, their annual revenue, the cash reserves, and how badly that company has seen a decline.

Like maybe a business making a million dollars a year with ten percent in overhead cost doesn't need the money as badly as a million dollar-year business with eighty percent overhead. And I'm sure inevitably you're gonna be getting people who lie on their applications, but still it seems like a better option than right now, which appears as though it's completely nonsensical and random. And that's not good.

So, basically, for anyone who owns a small business and you want money, it might be worth it to temporarily look into the bridge loan program if that's your only option. Besides that, it seems like the best we could do is wait, complain about it on Twitter, and then just see what happens. But on the bright side, like I said, it seems doubtful that you're gonna have to worry about them running out of money if they continue to expand it. Instead, you're just gonna have to worry about actually getting the money as promised.

So with that said, you guys, thank you so much for watching! I really appreciate it. As always, if you've not already subscribed, make sure to subscribe and hit the notification bell! Feel free to add me on Instagram; I post there pretty much daily. So if you want to be a part of it there, feel free to add me there too!

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So if you want a chance to get two free stocks with only a few minutes of your time, feel free to use that link down below in the description. Let me know which two free stocks you get! Thank you so much for watching, and until next time!