Goldman Sachs CEO David Solomon says 90% of small businesses have exhausted PPP funds

Finance news

Goldman Sachs CEO David Solomon told CNBC on Tuesday that small businesses it surveyed are in dire need of another round of emergency Paycheck Protection Program funding.

“They really have needs; 90% of them have exhausted their PPP funding at this point,” Solomon told Becky Quick in a “Squawk Box” interview. “More than half of them have had to lay off employees and really constrain their businesses.”

Solomon’s comments come as lawmakers are taking negotiations to approve another coronavirus stimulus bill down to the wire. Most versions of bills being discussed include fresh funding for the government’s small business relief loan program, part of the $2.2 trillion CARES Act passed in late March, as well as enhanced unemployment benefits.

Goldman has recently surveyed participants of its 10,000 Small Businesses program, a decade-long effort that gives entrepreneurs access to training and capital, Solomon said. The investment bank also announced that it funded the program with an additional $250 million, bringing its commitment this year to more than $1 billion.

“This is a huge employment engine for the economy, and they’re suffering right now,” Solomon said, adding that more than half of business owners weren’t taking a salary to keep their operations afloat. “They need capital, liquidity to bridge them. They can see light at the end of the tunnel.”

Berkshire Hathaway CEO Warren Buffett also spoke on “Squawk Box” on Tuesday, urging lawmakers to agree on a fresh round of support for small businesses. Buffett, who is co-chair of the Goldman program’s advisory council, has been involved with the small business group since its inaugural class.

Small businesses “have become collateral damage in a war that our country needed to fight, but we in effect voluntarily had an induced shut down of parts of the economy and hit many types of small business very, very hard,” Buffett said. “I hope very much they extend the PPP plan on a large scale.”

Buffett and Goldman have a relationship that goes back more than a half century. While Buffett generally has a dim view of investment bankers, whom he has accused of pushing mergers that aren’t in the best long-term interest of the companies involved, he has maintained close ties with Goldman over the years.

At the height of the financial crisis in 2008, Buffett plowed $5 billion into Goldman, getting special preferred shares paying a 10% dividend and warrants to buy another $5 billion in stock. Buffett’s Berkshire Hathaway sold most of his Goldman shares this year.