Illustration: Eniola Odetunde/Axios

Of all the economic stimulus programs, the most controversial and least popular is the Paycheck Protection Program, or PPP. That's a bit weird, since it's basically free money for small businesses, which is something you'd expect to be popular.

The state of play: The program managed to get $342.3 billion to small businesses (including Axios) in the space of just a few weeks. That's pretty impressive. Most of that money will go straight into paychecks, keeping Americans employed. And there's another $322 billion where that came from.

Why the anger? The biggest flaw with the PPP was just that it was underfunded. Almost all small businesses are eligible, as well as some larger ones. That created a two-class system where some businesses got funded and others didn't, which is unfair. Worse, many of the funded businesses seem to be the ones that needed the money least — they were already rich, or had access to capital markets.

  • Businesses had to apply through banks, and many banks, large and small, failed their clients. Technology crashed, phones weren't answered, and a lot of CEOs got very angry and frustrated.
  • The government wanted the banks to act like simple utilities. But banks aren't set up to do that. Instead, they're built to maximize complexity and cross-selling. Simpler and smaller banks seem to have done better at just getting applications in.
  • America's lenders earned $10 billion in fees for this underwhelming display of general incompetence, which turbocharged the anger.

What other ideas are out there? Here are three.

1. Free small-business overdrafts. Mark Cuban emails to suggest that instead of asking for 2.5 months of payroll in advance, small businesses should simply be automatically reimbursed every time they go overdrawn to pay workers. The overdraft is supplied by their bank, which has their payroll information, and then the bank is made whole by the Fed, using funds from Congress.

2. Don't use the banks at all. Instead, use the tax withholding system, whereby employers pay taxes on a pay-as-you-go basis to the government. Those withheld taxes can then be sent straight back to the employer as an employment subsidy.

3. A paycheck guarantee, which would be a bit like the system that Denmark has implemented. Set a cap of around $90,000 or $100,000 per year, and then the government covers 75% or so of workers' earnings up to that cap, by reimbursing employers.

Between the lines: All three of these ideas have the advantage that many small businesses don't trust the government to forgive their loans in seven weeks' time. If loan forgiveness happens overnight, or if there's never a loan at all, then businesses will feel much more comfortable using government money to pay workers.

Go deeper: The story behind the coronavirus job losses

Go deeper

Updated Jul 28, 2020 - Axios Events

Watch: Small business recovery during the pandemic

On Tuesday July 28, Axios Media Trends author Sara Fischer hosted the fifth of a six-event series on small business recovery across America, focusing on how female-led small businesses have innovated and used digital tools to pivot during the pandemic, featuring Nevada Sen. Jacky Rosen, National Association of Women Business Owners CEO Jen Earle and Sameka Jenkins, owner of Carolima’s Lowcountry Cuisine.

Sen. Rosen discussed her bipartisan work on helping to secure more funds for Nevada business owners, as well as how the hospitality industry in the state has pivoted.

  • How Nevada has innovated hospitality industry: "One thing that [Nevada] knows how to do is create an experience. [Casinos] have been designing this very cool Plexiglas [screen] that might go between slot machines or be used in restaurants...I think that some of those things may be exported to hospitality across the nation."
  • On working with small business owners to help them secure loans: "We're a large state in size, but small in population with about three million. So we're able to know each other, work together, and that's what's going to make this a success...Sole proprietors need to know that they can get these funds."

Jen Earle highlighted the obstacles that women encounter in securing loans and navigating unequal distribution of labor at home.

  • On unique challenges for women business owners: "Access to capital for women is a bigger issue...They've [started businesses] by bootstrapping, by utilizing credit cards, by using personal funding...They don't obviously have relationships with bankers."
  • How small businesses are central to their communities: "They support the nonprofits that are local. They support youth school programs, the soccer programs, things like that that really keep the economy vibrant."

Sameka Jenkins discussed her experience as a small business owner and how Carolima’s Lowcountry Cuisine has utilized social media to stay connected to their community.

  • How her business has leaned on digital tools: "[We've used] social media like Facebook, Instagram. We started doing live videos at the start of the pandemic...we've actually brought people into our home virtually and we've taught them how to prepare certain dishes."
  • How social media can keep members of a community close: "I think everyone's pivoted in their own way...For us, the videos were very helpful. Social media was very helpful...I think at this time, people want to see that transparency. People want you to share. People want to be a part of your lives. And they just want to know that, you know, we're all in this together."

Thank you Facebook for sponsoring this event.

Updated Jul 28, 2020 - Politics & Policy

Biden says John Lewis asked him to "heal the country"

Photo: Mark Makela/Getty Images

Joe Biden summoned the spirit of John Lewis, the congressman and civil rights hero, as he unveiled his own economic plan to address structural inequalities in America.

The big picture: At a speech in Wilmington, Delaware, Biden said Lewis told him on his deathbed that Americans should "stay focused on the work left undone to heal this nation and to remain undaunted by the public health crisis and economic crisis."

Updated 23 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Politics: Biden ahead in Wisconsin, Michigan as cases surge in the Midwest.
  2. Health: Fauci says U.S. may not return to normal until 2022 — Trump's testing czar: Surge "is real" and not just caused by more tests Some coronavirus survivors have "autoantibodies."
  3. Business: Consumer confidence sinking Testing is a windfall.
  4. World: Europe faces "stronger and deadlier" wave France imposes lockdown Germany to close bars and restaurants for a month.
  5. Sports: Boston Marathon delayed MLB to investigate Dodgers player who joined celebration after positive COVID test.