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Mark Cuban Says Small Businesses Are Being Left 'Out In The Cold'

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Mark Cuban Says Small Businesses Are Being Left 'Out In The Cold'

“Shark Tank” investor and Dallas Mavericks owner Mark Cuban has criticized banks for undermining the just launched small business loan program through their practices. 

What Happened

Appearing on CNBC’s “Squawk Box” on Monday, Cuban accused banks of placing hurdles in the way of small businesses trying to access the Paycheck Protection Program (PPP), which was designed to provide the necessary funding for them to stay afloat amid the pandemic.

Pointing the finger at the banks Cuban said on the program, “They’re being banks and they’re trying to determine if the credits are good and that’s leading to a lot of small businesses that are left out in the cold.”

See Also: 'I Am Trying To Get More Cash': Why Mark Cuban Isn't Hopeful On US Market Rally

He expressed his frustration with the lenders and referenced the experience of his own Shark Tank companies by saying, “I’ve tried to call the banks and say, ‘No, that’s not the point behind the PPP loan.’ This is not about that. This is a guarantee by the government and this is supposed to turn into a grant if you retain all your employees.”

Cuban warned that unless the “friction” in the lending program was removed there were going to be “a lot of issues and there’s going to be a lot of people laid off and a lot of companies that go out of business.”

Why It Matters

The $350 billion PPP is an attractive program for small businesses, as terms are more favorable than other short-term financing options. However, banks are being overwhelmed by hundreds of thousands of applications

The billionaire investor has been advocating the prioritization of workers in economic stimulus legislation. He has said that any company that receives government assistance should not be allowed to buy back its stock, according to CNBC.

Expressing hope that PPP loan distribution would improve over time just like the teething troubles faced by health care exchanges under the Affordable Care Act, he said, “Hopefully it will be the same way here, that we’ll get another tranche of money and the second tranche will have clearer rules and banks will recognize that this is not a typical credit environment where you’re supposed to analyze each application as it was a new loan.”

Photo Credit: Courtesy of Mark Cuban's Instagram.

 

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