When Small Businesses Get Loans They ... Buy Property?
Instead of paying salaries or shoring up working capital, Chinese borrowers are investing in real estate.
A dee-luxe apartment in the sky.
Photographer: Qilai Shen/BloombergBy offering cheap loans to small businesses, governments reason, entrepreneurs will continue to pay their employees. That should halt the economic fallout from the coronavirus outbreak. But so far, this endeavor has been a public relations fiasco and a logistics nightmare.
In the U.S., mom-and-pop businesses are having a tough time getting their hands on stimulus loans, which turn into grants if the money is spent on salaries. Meanwhile, bigger companies such as Shake Shack Inc. found administrative loopholes to receive millions (since returned), and even hedge funds and private equity firms want a slice of the $350 billion offered by the Small Business Administration, a pool that’s already run dry.