Financial institutions stand to make billions from the $350 billion coronavirus bailout package for small and medium-sized businesses (SMBs), according to a Financial Times (FT) report on Tuesday (March 31).
The $2 trillion stimulus bill was passed on Friday (March 29) and announced that the Small Business Administration (SBA) will extend loans through banks and credit unions to SMBs crippled by the coronavirus and employing fewer than 500 people.
Lenders will reap the benefits of processing fees — 5 percent for loans under $350,000, 3 percent for loans under $2 million, and 1 percent for loans greater than $2 million. The fees will be covered by the federal government.
The loan will be forgiven if small businesses use the funds for payroll, mortgage interest, rent or utilities. If the business lays off people or reduces paychecks, less of the loan will be forgiven.
Businesses can take out loans up to $10 million that are equal to 2.5 times their average monthly payroll.
“Speed is the operative word,” said Jovita Carranza, administrator for the SBA. “Applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans.”
The SBA said there are 30 million SMBs with fewer than 500 employees in the U.S., employing almost 50 percent of the private workforce, some 60 million workers. The advocacy group National Federation of Independent Business indicate that roughly 75 percent of its members have been negatively affected in some way due to the COVID-19 pandemic.
Claudia Sahm, a former research section chief at the Federal Reserve, told FT that incentivizing banks with fees helps the SBA’s “limited capacity.” Millions of applications are anticipated.
A debt trap may loom for the smaller businesses that desperately, and immediately, need access to capital.
The impact will be most keenly felt by the businesses that rely on crowds, on foot traffic, to drive sales and profits. These are the same firms that have been shuttered across several states — barbershops, restaurants, gyms and nightclubs.
Wayfair has reduced the time needed to curate product listings by 67%, saved hundreds of thousands of dollars and improved some conversion rates by 2% by deploying Google’s artificial intelligence (AI) technologies.
The online retailer shared these results in a Sunday (Jan. 10) press release emailed to PYMNTS announcing that it is using Google’s Gemini models on Vertex AI to enhance its product catalog and unlock “the next generation of retail experiences.”
“With Google Cloud, we’ve been able to efficiently scale and enrich our product catalogs, enabling us to support a more seamless and engaging shopping experience for our customers,” Wayfair Chief Technology Officer Fiona Tan said in the release.
Gemini on Google Cloud improved Wayfair’s time-to-market by automatically categorizing products across its 30 million product portfolio, delivered cost savings by eliminating the need to manually tag attributes like color and style, and improved conversion rates by increasing the accuracy of product attributes and improving the coverage of attribute tags in the retailer’s catalog, according to the release.
The technology also automatically catches errors in product dimensions and flags inappropriate materials, per the release.
Wayfair is also using Gemini for Google Workspace to boost employees’ productivity, according to the release.
The retailer is using AI features in this suite of productivity apps to draft and respond to emails, summarize and proofread documents, build presentation templates and gain expertise in new areas, per the release.
“By harnessing the power of Gemini and Google Workspace, Wayfair is not only automating complex tasks and boosting employee collaboration, but also creating more personalized and engaging experiences for every shopper,” Matt Renner, president, global revenue at Google Cloud, said in the release.
The rise of large language models (LLMs) has thrust generative AI into the driver’s seat of retail technologies, prompting brands to reassess their strategies, according to the PYMNTS Intelligence and AI-ID collaboration, “What Generative AI Has in Store for the Retail Industry.”
The report found that 92% of companies are using AI-driven personalization to drive growth and that 77% of business leaders rank generative AI as the most impactful emerging technology.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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