Industry trade groups ask for expedited approval of legislation to streamline the loan forgiveness process, especially for small businesses.
11/30/2020 9:00
– Passage of legislation to reform the PPP will return the equivalent of $7 billion to the economy
– A majority of PPP loans are less than $150,000 and legislation proposed in the 116th Congress would expedite the loan forgiveness process.
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ACA International is advocating for changes to the Paycheck Protection Program (PPP) to improve the loan forgiveness process before the end of the year.
As part of that advocacy, ACA joined industry trade groups representing the accounts receivable management industry, banks, credit unions, financial institutions, nonprofits and businesses of all sizes, in a letter to members of Congress in support of legislation to reform the PPP.
“Congress can solve this problem and inject the equivalent of $7 billion into our economy by passing bipartisan, common-sense legislation to streamline PPP forgiveness for small businesses on Main Street in communities across the country,” according to the letter to Senate Majority Leader Mitch McConnell, R-Ky., House Speaker Nancy Pelosi, D- Calif., House Minority Leader Kevin McCarthy, R-Calif., and U.S. Sen. Charles Schumer, D-New York.
ACA and the industry trade groups are seeking passage of the Paycheck Protection Program Small Business Forgiveness Act, S. 4117, sponsored by U.S. Sens. Kevin Cramer, R-N.D., Bob Menendez, D-N.J., Thom Tillis, R-N.C., and Kyrsten Sinema, D-Ariz., and the Paycheck Protection Small Business Forgiveness Act, H.R. 7777, sponsored by U.S. Reps. Chrissy Houlahan, D-Pa., and Fred Upton, R-Mich., that would provide much-needed certainty for small businesses and streamline the loan forgiveness process.
Specifically, the bills provide for automatic forgiveness of a PPP loan that is not more than $150,000 if the recipient submits a one-page form. Further, they prohibit any enforcement or other action against a lender relating to loan origination, forgiveness, or guarantee based on the lender’s reliance on certifications or documentation submitted by a loan applicant or recipient.
In fact, PPP loans of $150,000 and under account for 87% of total PPP recipients, but less than 28% of the PPP loan dollars distributed.
“Passing such legislation that would expand the hold harmless protections for lenders will provide financial institutions that originated and currently service PPP loans the opportunity to focus their time and energy on providing much-needed credit and financial services to individuals and businesses by creating regulatory certainty for PPP loans in the future,” the letter states.