'We're Not Governments' — Cramer Says Small Business Owners Can't Front Their Employees Forever

CNBC's Jim Cramer on Monday criticized the launch of the small business loan program passed by Congress last month, arguing delays are heaping more burden on business owners.

"How many weeks do I have to front everybody?" Cramer said on "Squawk on the Street." 

Cramer owns two restaurants in Brooklyn.

While saying he's fortunate enough to be able to pay his employees in the absence of the small business loans, Cramer said the situation is different for many other entrepreneurs who have been impacted by the coronavirus pandemic. 

"Most people can't front people," he said. "We're not governments." 

Cramer's comments came shortly after billionaire entrepreneur Mark Cuban detailed challenges faced by some of the small businesses that he invests in from "Shark Tank."

Cuban, owner of the NBA's Dallas Mavericks, said some banks have questioned a company's gross margin and was therefore uncertain about making the loan.

The $350 billion small business loan program was created as part of the government's $2 trillion coronavirus relief package, which was approved in March and quickly signed into law by President Donald Trump.

Distribution of the small business loans were left in the hands of banks and other financial institutions such as credit unions. On Friday, fintech players such as PayPal and Intuit QuickBooks said they also were granted approval to participate from the Small Business Administration. 

Portions of the loan used to cover payroll and expenses like rent and utilities can be forgiven. 

Cramer said large banks should not be applying strict scrutiny to the small businesses that apply for loans through the Paycheck Protection Program.

If they treated it like a traditional loan application, "most of the banks wouldn't want to take these companies," Cramer said. 

"We're not creditworthy so to speak. We're not gigantic companies that have great balance sheets that need a loan," Cramer said.

Cramer said he thinks "something's very wrong" with the loan program thus far, and he called on the government to continue expanding the pool of potential borrowers.

He suggested companies that help with payroll services such as ADP and Paychex be allowed to help administer loans. 

"They have to offer an alternative. ... They can't just let us close," Cramer said.

The Treasury Department did not immediately respond to a request for comment on Cramer's comments.

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank," which features Mark Cuban as a panelist.

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