Barbara Corcoran: PPP loans have 'greatly improved'

The Corcoran Group Founder and Shark on ABC’s Shark Tank Barbara Corcoran joins Yahoo Finance’s Zack Guzman to discuss her outlook on the federal government's emergency stimulus loans for small businesses.

Video Transcript

ZACK GUZMAN: I'm Zack Guzman joined right now by "Shark Tank's" Barbara Corcoran, who is with us. And Barbara, we've been talking about the government's response to the coronavirus slowdown. Obviously, through "Shark Tank" and through your own business activity, you've been able to work closely with small business owners and entrepreneurs to get a pretty close first take on how the stimulus has helped and not helped.

You've been pretty outspoken about the PPP, the Paycheck Protection Program designed to help small business owners here. You said that the rollout was, quote, "horrendous." When we first saw it, you said that a lot of businesses couldn't access the funds. What have you seen as we've moved further along and got a whole second round of funding? Has your opinion changed at all?

BARBARA CORCORAN: Well, for the small businesses, yes. It's greatly improved. They've been able to get their hands on the money, which is terrific. There's one stipulation in the way it's funded that they hadn't changed I was really hoping they would change, which is you have to spend that money on keeping your current employees employed. And a lot of my small businesses that I've invested in can't open legally. And yet they have to keep people on payroll, doing nothing to make use of that package.

I wish there had been more leeway and said, well, you could use the funds for your employees when your business could open. If you think about that, it's the cart before the horse. So in a way, many of them feel like they're party to a crime. They're spending money on people and having them do nothing, and when they can open, they won't have the money to support them. So it's a little crazy, but I have to complain about something. You know, but it's still much better than the first round of financing because it was executed much more fairly.

ZACK GUZMAN: Yeah, and I mean, when we do look at it, too, that does seem to be an issue that Democrats are trying to work with Republicans right now. Of course, they introduced that $3 trillion package, the Heroes Act that passed the House.

And a provision of that would be looking at eliminating that rule that makes small business owners break it down 75% to 25% of that PPP money, 3/4 going to payroll costs versus other costs that will kind of free them up, as well as let them use it instead of over an eight-week period, the original eight-week period, over a period of 24 weeks. So there are changes that they're trying to push through. Republicans do seem to be holding up.

The overall package, though, one of the pieces of it is another round of stimulus checks, another potential $1,200 being shipped out to Americans. What's your take on the necessary moves here to actually help through all of this, as it seems to be opening up right now? Is another round of stimulus like that necessary?

BARBARA CORCORAN: Well, A, I don't think it has a chance of passing. That's the consensus. But let's assume for a moment it can pass or portions of it pass. I think there's a real need to help people who are living hand to mouth, single moms supporting two, three kids, people who have no hope of getting their job back for a long time, and can't make ends meet. Even people can't get their money on the unemployment checks, which is a lot of types there for a lot of folks out there. So there's a real need to help these people.

But you have to remember, too, it's a double-edged sword. The double edge on that one is it can disincentivize people to go back to work. And that's the fine line we're walking with the great majority of people right now. I know there's a guy in my neighborhood that has the cutest, little-- little tiny business guy. He employs four people in a coffee shop.

And he told me yesterday when I was talking with him on the street, he can't open because three out of four of his employees don't want to come back because they're making more money on unemployment. That's a problem. That disincentives people to come back to work. Not good. That guy wants to open and his employees are the problem.

I know my good friend Mark Cuban came out with that wacky idea. How wacky was it? I don't know. Maybe I'm missing a point, Mark. Please straighten me out if I have. But $1,000, give people every two weeks $1,000, but here's the catch-- they must spend the money.

OK, I don't get it. I mean, everybody I know who's getting those little stimulus checks like from Santa Claus from the government every week, they ain't saving and open a big savings account. They're spending it on food. Or the kid who hasn't worked for two months, he's a photographer. He's spending on his $1,600 rent in the South Bronx. Come on. Nobody's saving that money, so I don't get that one.

But the bottom line is we need the jobs back. Anything that will give us the jobs back is the right incentive. And so that works both ways. It swings both ways. And nationwide, what are going to bring jobs back? Accurate and consistent testing. That's what we need. That's the medicine to fix the whole shooting match-up, OK?

Anything, little stopgaps don't really work, but in the meantime, a lot of people out there need really tremendous help, just to be able to feed their family. And those people have to be given a way to make ends meet. I think it's our obligation.

ZACK GUZMAN: No, I mean, I think you're highlighting kind of the issue right now as we kind of hit this next wave of planning around it, too. I mean, the concerns about a second wave of closures because there are still so many questions about what could happen as we do open up here because you essentially can't answer question of how much more aid and stimulus do you need because you don't know if there will be another downturn.

So I guess testing and precautions-- I mean, here in New York, we've seen people wearing masks. That's not necessarily the case in other states that have reopened. So I mean, when you're planning all that out, considering the time that it takes to get something passed, the problems that you have to get both parties to agree in Washington, to get something through, is there a concern on your mind that maybe even if things do start to deteriorate here, there wouldn't be enough to happen to prevent a very serious economic downturn on the back end?

BARBARA CORCORAN: Well, you know, I worry about that every day. I think we're-- we have just as much potential heading to a another depression, not just a recession, a real deep depression, if we continue with this jobless-- you know, the numbers are atrocious. Something has got to change. But we could say what we want in predicting this or that.

But the bottom line is we don't know because there's no end date. The end date is beyond our reach. So always stuck with this feeling the anxiety and second guessing what should be done, what shouldn't be done, and what's the real option right now is to make an interim arrangement to try to help people as they go and to help the right people that really need the help without going overboard on the people that don't need the help. And all I know is I'm really happy I'm not in politics. I can't imagine how one would even figure out all that stuff out.

ZACK GUZMAN: Well, hey, you're talking about Mark Cuban here and his wacky ideas. I mean, he's been very coy about plans to run for president here. Real quick before we let you go, any sense in a change in his mind from where you're sitting?

BARBARA CORCORAN: I don't care what Mark thinks, if he's going to run or not run. I spoke to his wife on his 60th birthday, which was about five months ago at his birthday party. And I went right to her and said, hey, listen. Are you going to let Mark run for president? She said absolutely not. And guess what? I believe her.

ZACK GUZMAN: I think that that might be the best way to think about it, too. There's always other ways of getting inside someone's head sometimes.

BARBARA CORCORAN: You got it.

ZACK GUZMAN: [INAUDIBLE] Barbara Corcoran, the host of "Shark Tank," always appreciate you taking the time to chat with us. Be well.

BARBARA CORCORAN: My pleasure. You, too.