David Solomon, CEO of Goldman Sachs, speaking at the World Economic Forum in Davos, Switzerland, on January 23, 2020.
Adam Galacia | CNBC
Goldman Sachs CEO David Solomon told CNBC on Tuesday that the small businesses surveyed needed another round of emergency funding from the Wage Protection Program.
“They really have needs; 90% of them have exhausted their PPP funding right now,” Solomon told Becky Quick in an interview with “Squawk Box.” “More than half of them have had to lay off employees and really restrict their business.”
Solomon’s comments come when lawmakers are negotiating to approve another coronavirus stimulus bill. Most versions of the bills being discussed include new funding for the government’s small business loan program, which is part of the $ 2.2 trillion CARES Act passed in late March, as well as a higher unemployment benefit.
Goldman recently surveyed participants in its 10,000 small business program, a ten-year effort that gives entrepreneurs access to training and capital, Solomon said. The investment bank also announced that it was financing the program with an additional $ 250 million, which raised its commitment this year to more than $ 1 billion.
“This is a huge employment engine for the economy and they are suffering right now,” Solomon said, adding that more than half of employers were not paid a salary to keep their operations afloat. “They need capital, liquidity to overcome them. They can see light at the end of the tunnel.”
Berkshire Hathaway CEO Warren Buffett also appeared in Squawk Box to urge lawmakers to agree on a new round of support for small businesses. Buffett, who is co-chair of the Goldman program advisory board, has been involved with the small business group since its inaugural class.
Small businesses “have become collateral damage in a war our country needed to fight, but in fact we voluntarily had an induced closure of parts of the economy and affected very, very hard many types of small businesses, ”Buffett said. “I look forward to expanding the PPP plan on a large scale.”
Buffett and Goldman have a relationship that goes back more than half a century. While Buffett generally has a weak view of investment bankers, whom he has accused of pushing for mergers that are not in the best long-term interest of the companies involved, he has maintained close relationships with Goldman over the years.
At the height of the 2008 financial crisis, Buffett threw $ 5 billion into Goldman, securing special preferred shares that paid a 10% dividend and guaranteed to buy another $ 5 billion in shares. This year, Buffett’s Berkshire Hathaway sold most of its Goldman shares.