Ripping Off the Band-Aid: Why Payment Protection Programs are Not Good in The Long Term


With speculation that another grand wave of COVID will strike again by fall, business owners and entrepreneurs should be stirring up a plan on how to handle it. When COVID originally swept the nation, it came as a surprise for most and suddenly caused major disruption for nearly everyone as a result of nation-wide stay at home orders. And even as things slowly begin to open back up, it will be awhile before we re-establish a sense of normalcy. That being said, if a second spike in COVID rates come about and the nation shuts down once again, you should not be caught off guard. Now is the time to prepare and set up your course of action.

If your business has survived up until this point, it is not just by chance. It is because you have a strong ability to adapt and adjust. However, one of the hardest parts of adapting has been finding funding sources that would allow you to press forward during these high pressure times. One of the first sources that many businesses turned to was obviously the government and they responded by establishing Payment Protection Programs aka PPP’s. While in theory this sounded like a good plan, when put into action it’s not going to turn out well for many of the small businesses and entrepreneurs out there.

Let me explain why.

For starters, a lot of the funds dedicated to the PPP were not distributed to the people who needed it the most. It comes as no surprise that a lot of the funds went to big corporations that already have investors and money in reserves. Meanwhile, hundreds of thousands of small businesses have had to close their doors because the government either left them with empty promises or the assistance came way too late. And even if you were able to receive PPP funding, the danger doesn’t stop there.

There are millions of small businesses still at risk.

As I have watched Congress scramble to get working capital to businesses across America, it’s clear to me that we’re now seeing a gigantic exercise in bridge lending. For those of you who don’t know, bridge lending is putting money into a company in an attempt to “Bridge” the otherwise normally healthy company into a time in the future when they are financially self-sustaining. In venture capital, start-up companies routinely commit to short-term loans that bridge their negative cash flow into a larger equity financing (i.e., “permanent capital”).

However, lending to an ENTIRE economy of normally healthy, mainstream businesses isn’t normal. It’s a new drill for our government and for the private investment community, both institutional and HNW retail investors. This is why it has come with so many kinks along the way. Usually evaluating an investment, in particular, a bridge loan, is all about expectations and the data supporting those expectations. Sometimes you are right (generating investment income) and sometimes you’re wrong (you lose on the investment).

However, with COVID, there are so many unknowns, that investors have to shift their thinking a bit. There needs to be talks about bridge lending or other investment structures that give businesses a sufficiently long window to either A) return to their “old normal” (pre-2020) or
B) find their “new normal.” My guess is that it will take 2 years or more to find financial equilibrium, considering the disruption to supply-chains that has occurred.

With the PPP, there just isn’t enough time for businesses to regain their footing. Yes, it is a necessary band-aid. But, in two months, one of the following will have happened:

  1. A very high level of small business bankruptcies
  2. Another massive PPP-like infusion has to be established
  3. Longer-term loan and equity investments have to be put in place.

The problem with band-aid solutions is that eventually the band-aid has to come off and in this case the wounds will not be healed when that happens. So essentially it all boils down to one question… do we want to remain dependent on these government “solutions?”

Personally, I’d rather have individual investors determine which companies survive COVID through thoughtful, case-by-case investment analysis, rather than the government, provide an ongoing “Get out of Jail Card” for all. While the government is making an effort to help, their methods are actually doing more harm than anything. Leaving the small business financial aid in the hands of investors who know the best ways to efficiently funnel money into a company, is much more useful. It’s tough, but it’s the only way to beat the odds – it’s why capitalism works.

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The U.S Must Win the 5G Race by Any Means Necessary



5G stands for fifth generation cellular wireless. 5G will introduce three new revolutionary features in our world: exponentially greater wireless Internet speed (up to 100x faster than the current 4G), lower latency (will be more responsive), and the ability to connect lots of devices at once (for sensors and smart devices). To give an example, with 4G it would take 6 minutes to download a 2-hour movie. With 5G, it will take all of 3.6 seconds.

The race to 5G is a race that will dictate the world leaders of the next decade. For example, when US won the race to 4G in 2010, US experienced tremendous economic and job growth. 4G technology allowed the US wireless industry to increase related jobs by 84% from 2011 to 2014, which added $125 billion in revenue to American companies, with $40 billion coming from app stores. The first 4G phones in the US appeared in 2010, which enabled 4G applications that changed our world, such as Snapchat, Uber, AirBnB, video calls, etc. If the US would’ve lost this race, these industries, advances in technologies and revenues would have gone to other countries.

As the world’s long-time leader, the US wireless technology industry employs almost five million professionals and contributes $475 billion per year to the American economy. Winning the 5G race could cause those numbers to explode in the near future. Studies show that 5G has is likely to create almost three million new jobs— and add $500 billion to US economic growth. It is a big deal.


As our world turns digital, wireless technology becomes the most important competitive advantage between nations. The race to 5G is the most important thus far because our essential infrastructure in this country will be built using wireless technology. Our civic, commercial and military life depends on it.

100x faster wireless speed than 4G and reduced latency, will allow us to exponentially improve our connection with all devices. This will create new opportunities in manufacturing, transportation, health care, education, agriculture, and more. 5G will enable new services that will drive economic growth and job creation for years to come.

Historically, Europe won the 2G era, Japan won the 3G era, and of course, the US won the 4G era. But now, China poses a severe threat to winning the 5G era, which will have countless negative implications for the U.S. At a hearing before the Senate Committee on Commerce, Science, and Transportation in 2018, Mississippi Sen. Roger Wicker stated that “failing to win the race to 5G would not only materially delay the benefits of 5G for the American people, it would forever reduce the economic and societal gains that come from leading the world in technology.”


Although US has a great reputation for its mobile technologies, Asia is dominantly leading the way regarding 5G. Four of the world’s five most 5G advanced nations are China, South Korea, Japan, and India.

However, no one can tell with certainty who will win the 5G race. A 2018 Cellular Telecommunications Industry Association (CTIA) report claimed that US was in third place in the 5G race, behind China and South Korea, while a 2019 CTIA report claimed that U.S. now shares the number one spot with China. Other reports put China as the clear winner, with functional 5G technology by 2020, while they claim that the U.S. is 5 years behind. AT&T Chief Executive Officer Randall Stephenson declared in March 2019 that China isn’t beating the United States on 5G – but then again, AT&T deceptively branded their new 5G E network pretending it uses 5G technology, when it used the regular 4G technology.

While these reports do not provide any clarity, these investments will. Starting in 2015, China has doubled down on investments in 5G technology, and has outspent the US by $24 billion to construct 350,000 new, 5G-compatible cell towers. During the same time, the US has built only 30,000 towers.

The reason China has prioritized development of 5G is because they understand that the race for 5G is a race for world-wide control. Michael Wessel, a member of the U.S.-China Economic and Security Review Commission, explained that China’s goal is to become the global innovation leader, and will do everything in its power to achieve this goal, legally or illegally.

One of the most important weapons for China to win the 5G race is the Chinese company Huawei. Currently, Huawei is spending a tremendous amount of resources on R&D (almost 40% of their workforce), most of which is dedicated to 5G. This is more than Microsoft, Intel or Apple’s R&D efforts.

In addition to superior dedicated resources, Huawei has a long negative history of operating outside the international law and order. Huawei currently faces bans in Japan, Australia, New Zealand and the U.S. over fears that China’s government could use its systems to spy on their countries. The CIA, FBI and NSA publicly warned against Huawei. The Pentagon banned Huawei and its products. Huawei has long been accused of espionage, and for doing illegal business with Iran. Most recently, Canada helped the U.S. arrest Huawei’s CFO Meng Wanzhou, and President Trump signed an executive order banning any US company from doing business with Huawei.

It is extremely important that President Trump, the U.S. and its allies stop or slow down Huawei’s influence and operational capabilities throughout the world. As stated earlier, winning the 5G race will allow the development of exponential technology and booming economic growth for those who employ this technology first.


If Huawei and China win the 5G race, they will undoubtedly use this technology to win over allies and dominate the world for a long time to come. They will offer this technology to other countries in exchange for trade deals, military partnerships, and economic prosperity. They could also choose to offer this technology to all US enemies, except for the U.S., leaving our country unable to compete. Thus, it is of the utmost importance that the United States wins the race to 5G.

President Trump must continue to put pressure of China and Huawei, in an intelligent way. There is no easy answer to do so, especially with the US and China locked in a tariffs war. All trade talks between the two countries will definitely include Huawei as a bargaining chip.

The Trump administration, US industry and government leaders, and allies must work in concert to win this race, by any means necessary, and make sure that all (or most) other countries will receive the 5G technology from the US, rather than from China.