Bipartisan bill would provide for automatic forgiveness of certain Paycheck Protection Program loans and relieves paperwork burdens for small businesses.
8/9/2020 15:00
Bipartisan legislation introduced on June 30, 2020, would modify the loan forgiveness under the U.S. Small Business Administration’s (SBA) Paycheck Protection Program (PPP), established to support small businesses in response to COVID-19.
ACA International is supporting this legislation, the Paycheck Protection Program Small Business Forgiveness Act (S. 4117), for the help it would provide small businesses during the loan forgiveness process.
“When Congress created and passed the Paycheck Protection Program, we appreciate that the intent was to make sure small businesses had the liquidity and the help they needed to get through difficult times resulting from COVID-19,” ACA International CEO Mark Neeb said in a letter to the bill’s sponsors, U.S. Sens. Kevin Cramer, R-Nd., Kyrsten Sineman, D-Ariz., Bob Menendez, D-N.J., and Thom Tillis, R-N.C. “Many ACA International members utilized the benefits of the PPP, which allowed many of your constituents to remain employed,” Neeb said.
S. 4117 provides for automatic forgiveness of a PPP loan that is not more than $150,000 if the recipient submits a one-page form, according to the bill summary. It also prohibits 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.
As of Aug. 6, the SBA has approved more than 5 million loans under the Paycheck Protection Program, with the average loan size at $101,459, according to PPP program data from the SBA.
S. 4117 would provide automatic forgiveness of a PPP loan that is not more than $150,000 if the recipient submits a one-page form.
“This legislation will help small businesses throughout the country save thousands of hours of time and resources on paperwork and instead use those resources in ways that will continue to spur the economy,” Neeb said.
The PPP was implemented to allow qualifying small businesses access to low-interest loans equaling 2.5 times their average monthly payroll, up to $10 million, ACA previously reported. The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) bill—including extending the availability of the program for small businesses.
The SBA, in consultation with the U.S. Department of the Treasury, has also provided guidance to address borrower and lender questions concerning forgiveness of PPP loans as part of the CARES Act and as amended by the Paycheck Protection Program Flexibility Act.
S. 4117 was referred to the Senate Committee on Small Business and Entrepreneurship for consideration.
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