Here’s Why Adding Billions More to the Second Round of PPP Won’t Fix It

Why simply adding more money to the pot won’t end the problem of venture-backed startups and large corporations landing relief loans

Photo: Jim Watson/Getty Images

What went wrong the first time

Although it sounds counterintuitive, the extremely generous terms of the existing PPP have actually harmed many firms in need of benefits, by forcing them to compete for funding with the entire U.S. small business sector.

Getting it right the second time around

What we need going forward is a streamlined program that directly targets the hardest hit firms by forgiving debt only to businesses that can demonstrate need, while using less favorable lending terms to thin out enrollment.

What comes next?

Assistant Professor of Finance at the MIT Sloan School of Management, researching links between finance and the macroeconomy.

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