June 16, 2020
WASHINGTON, D.C. – U.S. Senator Angus King (I-Maine) joined a bipartisan group of 44 senators in urging Treasury Secretary Steve Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza to ease paperwork requirements for small businesses seeking loan forgiveness under the Paycheck Protection Program (PPP). In the letter, Senator King and his colleagues specifically request that the loan forgiveness application for loans under $250,000 be limited to one page in length. Today’s push is Senator King’s latest effort to reform the PPP in order to make the program easier to use for small businesses; earlier this month, his legislation extending the length of time businesses could use funds and allowing businesses to use more of their loans on non-payroll expenses passed the Senate unanimously and was signed into law.
“The Paycheck Protection Program (PPP) has been critical for helping small businesses remain viable and keeping Americans employed during the COVID-19 pandemic,” wrote the Senators. “However, we would like to make you aware of a serious problem with the PPP Loan Forgiveness Application. We have received feedback from a number of businesses and lenders that the forgiveness application is difficult to understand and to complete. We ask that the Department of the Treasury (Treasury) and the Small Business Administration (SBA) urgently revise the application so that it is no longer than one page for any loan under $250,000.”
In addition to Senator King, the letter is signed by U.S. Senators Mike Rounds (R-S.D), Mike Crapo (R-Idaho), Thom Tillis (R-N.C.), Jim Risch (R-Idaho), Steve Daines (R-Mont.), James Lankford (R-Okla.), Doug Jones (D-Ala.), Mike Braun (R-Ind.), John Cornyn (R-Texas), John Hoeven (R-N.D.), Jerry Moran (R-Kansas), Joni Ernst (R-Iowa), Chuck Grassley (R-Iowa), Shelley Moore Capito (R-W.Va.), Dan Sullivan (R-Alaska), Mark Warner (D-Va.), Kelly Loeffler (R-Ga.), Bill Cassidy (R-La.), Marsha Blackburn (R-Tenn.), John Barasso (R-Wyo.), Krysten Sinema (D-Ariz.), Ted Cruz (R-Texas), Kevin Cramer (R-N.D.), John Boozman (R-Ark.), Tom Cotton (R-Ark.), John Thune (R-S.D.), James Inhofe (R-Okla.), John Kennedy (R-La.), Richard Burr (R-N.C.), Cindy Hyde-Smith (R-Miss.), Cory Gardner (R-Colo.), Deb Fischer (R-Neb.), Ben Sasse (R-Neb.), Roger Wicker (R-Miss.), Lisa Murkowski (R-Alaska), Joe Manchin (D-W.Va.), Tina Smith (D-Minn.), Mitt Romney (R-Utah), Pat Roberts (R-Kansas), Pat Toomey (R-Penn.), Roy Blunt (R-Mo.), Richard Shelby (R-Ala.).
Senator King has pushed to make sure federal funds are being directed to the sectors of our society that need them most as quickly and efficiently as possible. In addition to his leadership in reforming the PPP’s timeline and providing increased flexibility for business owners, Senator King has pushed the SBA to provide clear, concise, and accurate guidance on eligibility for Economic Injury Disaster Loans. He has also cosponsored legislation that would repeal a massive tax break for a small group of wealthy taxpayers that was included in the CARES Act. Since the coronavirus crisis began, he has remained in regular contact with Maine business leaders, including tele-conferences with the Maine State Chamber of Commerce, Portland Buy Local, Penobscot Bay Regional Chamber of Commerce, New England Council, and 500 Maine employees of Sun Life.
The letter can be found HERE or below:
Dear Secretary Mnuchin and Administrator Carranza:
The Paycheck Protection Program (PPP) has been critical for helping small businesses remain viable and keeping Americans employed during the COVID-19 pandemic. However, we would like to make you aware of a serious problem with the PPP Loan Forgiveness Application. We have received feedback from a number of businesses and lenders that the forgiveness application is difficult to understand and to complete. We ask that the Department of the Treasury (Treasury) and the Small Business Administration (SBA) urgently revise the application so that it is no longer than one page for any loan under $250,000.
When Congress created the PPP, its purpose was clear: get immediate funding into the hands of small business owners impacted by the COVID-19 pandemic so their employees could stay on the payroll and maintain benefits and so that businesses could resume normal operations as soon as it was safe to do so. Given the innumerable challenges that small business owners face, PPP loans were designed to be forgiven to prevent small business owners from incurring additional debt, provided employees were kept on payroll.
The text of the CARES Act, which was approved unanimously by the Senate, specified three criteria that the PPP forgiveness application was required to include:
1. Documentation verifying the number of full-time employees on payroll and their respective pay rates;
2. Documentation verifying payment of mortgage, lease, and utility payments for which the business owner sought PPP funds; and
3. A certification that the information presented in the forgiveness application is true and correct
While the Small Business Administrator was also given the ability to require additional documentation necessary to verify proper use of PPP funds, we believe it is beyond the program’s intent to require the information solicited in the 11-page forgiveness application that the SBA recently released. We appreciate the interest in appropriately auditing the use of government money. However, the loan forgiveness application – which understandably needs more information for loans worth significantly more than $250,000 – is three times longer than the original application for the PPP. Many of our constituents and the financial institutions who processed their PPP loan applications have reported that the existing forgiveness application will be difficult to complete and could cost business owners several thousand dollars in professional tax advice.
The Administration’s intentions to scrutinize PPP loans above $2 million is an appropriate oversight of taxpayer resources. Failing to streamline the loan forgiveness application for loans that are worth a mere fraction of that will not only leave millions of small business owners without the relief that they were promised by Congress, but it will also introduce a needless complication to our nation’s economic recovery.
We look forward to continuing to work with you and the Administration in supporting our country’s small businesses and their employees during this difficult time. Thank you for your prompt attention to this matter.