Streamlined Forgiveness for Smallest PPP Recipients Has Bipartisan Support

Treasury Secretary Steven Mnuchin last week indicated he would support a bipartisan effort being led by Sens. Cramer, Menendez, Tillis and Sinema for streamlined forgiveness for Paycheck Protection Program loans for the smallest loan recipients. The most recent coverage on the need for simplified PPP forgiveness for mom-and-pop small businesses is below:

• A bill that would stop just short of automatic forgiveness for loans of $150,000 and under is gaining bipartisan support. Treasury Secretary Steven Mnuchin gave the idea a big boost on Friday, when he told lawmakers that they should consider automatic forgiveness for smaller loans … Unless Congress intervenes to streamline the program in the coming weeks, they say it could create huge new headaches for businesses across the country that are already struggling to keep their doors open during the surging coronavirus outbreak. (Politico, 07/20/20)
• Bankers — and many small businesses they have lent coronavirus relief money to — are asking Congress to approve a simplified process for forgiving most of the small business loans under $150,000 disbursed through the Paycheck Protection Program. Those loans total about $140 billion, representing nearly 87 percent of all the businesses that took part in the $521 billion Paycheck Protection Program. Many of them would have already been eligible to keep most of the money; this plan would simplify the process. (The New York Times, 07/19/20)
• Congress should consider automatically forgiving Paycheck Protection Program loans taken out by the smallest U.S. businesses—and offer a second helping of aid to firms hard hit by the pandemic, Treasury Secretary Steven Mnuchin said Friday … Mr. Mnuchin, testifying before the committee, suggested the Trump administration would back a proposal from U.S. banks and others who have said the massive lending program should see loans under $150,000 automatically turned into grants. (The Wall Street Journal, 07/17/20)
• The lobbying group wrote that the small business owners’ “time and resources would be better focused on getting the economy safely back up and running, not processing burdensome paperwork.” … Treasury Secretary Steven Mnuchin appeared to back this proposal while testifying before Congress. He suggested that not all PPP Loans should be verified. He went on to say, “One of the things we will talk about is should we just have some forgiveness for the small loans? I think that is something we should consider.” (Forbes, 07/18/20)

NOTE: CBA led a coalition of more than 140 small business borrowers and lenders in a letter to Congressional Leaders advocating for the passage of bipartisan legislation introduced by Sens. Kevin Cramer (R-N.D.), Bob Menendez (D-N.J.), Thom Tillis (R-N.C.) and Kyrsten Sinema (D-Ariz.) to streamline Paycheck Protection Program forgiveness for the smallest borrowers. The bipartisan legislation calls for streamlined forgiveness of PPP loans less than $150,000 if the borrower answers a simple, one-question attestation the funds were used in accordance to PPP guidelines to retain employees.

The simplified forgiveness could collectively save the smallest small businesses owners more than $7 billion dollars and hours of paperwork. The coalition letter notes independent analysis by AQN Strategies anticipates the combined small business resource requirements of time and/or third-party expenses could represent an effective cost of $2,000-$4,000 for each business that applies for forgiveness, requiring 20-100 hours of time.