23 December 2020
and it is unlikely to be good for the United States Factoring Industry
As of yesterday morning December 21, 2020, it appears that Congressional lawmakers have reached a final agreement on the roughly $900 billion coronavirus relief package, moving Congress closer to approval of a fresh infusion of aid to households, small businesses and schools after months of gridlock.
While all of the details remain to be published, the diagram from the online edition of the Wall Street Journal shows component parts of the package and the magnitude of the next round of PPP to small businesses in the United States. Almost 40% [36.1%] or $325 billion of the total $900 COVID-19 relief package is earmarked to go toward the Paycheck Protection Program.
If what happened earlier this spring repeats itself, the United States factoring industry should prepare for a tsunami of volume reduction and a significant drop in the need for SMEs to factor its accounts receivables. Let’s hope not, but it seems very logical that our industry will again suffer some negative consequences as a result of the actions taken by Congress to fight the pandemic.
As more details are released, we will update this potential giant step backwards for our industry when it seemed we just finished building back our AR portfolios for the first wave of PPP gifts from Uncle Sam.
So instead of Santa Claus coming this year, seems like we get the Grinch instead. Bah Humbug!