The Atlanta FED President Bostic warned today that Payment Protection Act money provided by the Cares Act needs to be shoveled out to small businesses quickly even if there are fewer immediate controls. He urged that the payments be made immediately with careful audits to follow later to prevent fraud.
“What we are seeing and hearing is credit challenges are becoming more widespread and more acute, and as that happens solvency becomes more into play,” Bostic said. “There are wide swaths of the economy seeing significant drops in demand, so the cash flows are so low they are eating through whatever savings they had at a more accelerated pace.”
“Time is not our friend,” Bostic said. “The goal is really to get as many key companies as possible to still be around at the end.”