Securitizing Notes of Small Businesses and Needy Workers

• Autore: Tamar Frankel
• Carica: Professor of Law Emerita Boston University School of Law
• Pagine: 159-162

llV

OLUME

6llI

SSUE

2 O

BITER

D

ICTUM

U

NIVERSITY OF

B

OLOGNA

L

AW

R

EVIEW

hps://doi.org/10.6092/issn.2531‐6133/13812

Securizing Notes of Small Businesses and Needy Workers

EDITORIAL NOTE

A previous version of this paper was published in Bloomberg Tax(09/28/2020).

The current one has been reprinted with the Author’s permission.

Businesses, whether large ones or small ones, such as restaurants and small shops, are

presently closed and some of their employees have been laid off.1Currently, the

government is lending money to these small businesses2and the now unemployed

workers for their sustenance. It then collects the payments from some of the borrowers

and the source of the rest of the money is taxes.3Since not all, or perhaps only a few,

small businesses own real estate, they might sign notes promising to repay the loans but

can offer no asset backing. Presumably, the nation’s financial deficit is growing.4The

government adds the aggregate of the loans to the country’s costs and tax collection.5

1E.g., Andrew Bender, COVID-19 Claims Nearly 73,000 US Businesses, with No End in Sight, Forbes, July 29, 2020,

available at https://www.forbes.com/sites/andrewbender/2020/07/29/covid-19-claims-nearly-73000-us-

businesses-with-no-end-in-sight/#42442d75d73f (last visited July 31, 2020).

2Brianna McGurran & Kelly Anne Smith, List of Coronavirus (COVID-19) Small Business Loan and Grant Programs,

Forbes, Apr. 10, 2020, available at https://www.forbes.com/sites/advisor/2020/04/10/list-of-coronavirus-

covid-19-small-business-loan-and-grant-programs/#50b8d323cc4b (last visited July 31, 2020).

3See Kelly Anne Smith, Congress Approved More Funding for the Paycheck Protection Program. Here’s

What You Need To Know, Forbes , Apr. 22, 2020, available at https://www.forbes.com/sites/advisor/2020

/04/22/the-senate-approved-more-funding-for-the-paycheck-protection-program-heres-what-you-need-

to-know/#329f97304084 (noting that loans will be forgiven if certain requirements are met).

4Cong. Budget Office, Monthly Budget Review for June 2020, available at https://www.cbo.gov/publication/

56458 (last visited July 31, 2020) (noting that estimated “federal budget deficit in June 2020 was $863 billion,

compared with a deficit of $8 billion in the same month last year,” due “economic disruption caused by the

2020 coronavirus pandemic” and “federal government’s responseto it”).

5E.g., Jeff Cox, The Government Budget Deficit Is About to Explode to Fight the Coronavirus, CNBC, Mar. 22, 2020,

available at https://www.cnbc.com/2020/03/22/government-budget-deficit-is-about-to-explode-to-fight-

the-coronavirus.html ( last visited July 1, 2020).

159