SBA simplifies PPP forgiveness for small loans
The Small Business Administration (SBA) and Treasury Department announced that they are simplifying the loan forgiveness application for Paycheck Protection Program (PPP) loans under $50,000.
“We are committed to making the PPP forgiveness process as simple as possible while also protecting against fraud and misuse of funds,” Treasury Secretary Steven Mnuchin said Thursday evening, calling for additional simplification through legislation.
The simpler, two-page form businesses can fill out to have their PPP loans forgiven is meant to ease burdens on struggling small businesses.
Small-business groups praised the move.
“We are thrilled about this new SBA and Treasury interim guidance to help small businesses during a time many of them are looking at the last quarter of estimated tax payments and year-end accounting,” said Keith Hall, president and CEO of the National Association for the Self-Employed.
The National Association of Federally-Insured Credit Unions, which had been critical of some early PPP missteps, said it was a “move in the right direction.”
The PPP program, part of a March’s CARES Act, was created in order to help businesses hit by the pandemic keep their doors open and workers on the books as the economy seized up. In all, the program distributed 5.2 million loans worth $525 billion, which Treasury estimated helped save 51 million jobs.
The program debuted to some doubts, as smaller businesses had a harder time securing loans and major chains were found to have received large loans. Many of the large businesses returned the loans after an outcry.
But the program was popular, especially for businesses who could have the loans forgiven altogether, and Congress approved a second round of it when original funds ran out.
The program expired in late July, and may be renewed again if Mnuchin and Speaker Nancy Pelosi (D-Calif.) are able to clinch a deal on new COVID-19 legislation. The odds of a deal remain wobbly, as President Trump has reversed himself a number of times on whether it should move ahead, and the sides remain hundreds of billions apart in their offers.
Mnuchin said new legislation could further help ease the process for streamlining loan forgiveness.