David Solomon, CEO of Goldman Sachs, says 90% of small companies have used up PPP funds
David Solomon, CEO of Goldman Sachs, told CNBC on Tuesday that the small businesses he surveyed urgently needed another round of funding for the emergency paycheck protection program.
“They really have needs; 90% of them are out of their PPP funds by then,” Solomon Becky Quick said in a Squawk Box interview. “More than half of them had to lay off employees and really cut their business.”
Solomon’s comments come as lawmakers get to the heart of negotiations to approve another coronavirus stimuli law. Most versions of the bills being discussed include new funding for the state’s small business loan program, which is part of the $ 2.2 trillion CARES bill passed in late March, and improved unemployment benefits.
Goldman recently surveyed participants in its 10,000 Small Businesses program, a decade-long effort that gives entrepreneurs access to education and capital, Solomon said. The investment bank also announced that it has funded the program with an additional $ 250 million and increased its exposure to over $ 1 billion this year.
“This is a huge job engine for the economy and they are suffering right now,” said Solomon, adding that more than half of business owners are not getting paid to keep their businesses going. “You need capital and liquidity to bridge them. You can see light at the end of the tunnel.”
Berkshire Hathaway CEO Warren Buffett also spoke on Tuesday on “Squawk Box,” calling on lawmakers to agree on a new round of small business support. Buffett, co-chair of the Goldman Program Advisory Board, has been with the Small Business Group since his first grade.
Small businesses “have become collateral damage in a war our country had to wage, but we have actually voluntarily had an induced shutdown of parts of the economy and hit many types of small businesses very, very hard,” Buffett said. “I very much hope that they expand the PPP plan on a large scale.”
Buffett and Goldman have a relationship that dates back more than half a century. While Buffett generally looks bad at investment bankers who he has accused of driving mergers that are not in the best long-term interests of the companies involved, he has maintained close relationships with Goldman over the years.
At the height of the financial crisis in 2008, Buffett plowed $ 5 billion into Goldman, with special preferred stocks receiving a 10% dividend and warrants to buy an additional $ 5 billion in shares. Buffett’s Berkshire Hathaway sold most of its Goldman stock this year.