Senate Democrats want Treasury Secretary Steven Mnuchin and Small Business Administration head Jovita Carranza to simplify the process of applying for loan forgiveness as part of the Paycheck Protection Program.
The senators urged a number of changes, including the creation of an easy to use form for smaller loans, well-staffed lines to offer help for those applying to the program, and a “suite” of online tools designed at helping applicants. The senators also want the Treasury to issue guidance around safe harbor protection for lenders to borrowers requesting smaller loans
“As the program enters its next phase and borrowers begin to seek forgiveness of their loans, there is an immediate need for significant improvements to the forgiveness application process, which is tremendously cumbersome and overly complex, especially for very small businesses, sole proprietors, and underserved borrowers,” wrote Senate Minority Leader Chuck Schumer and Sen. Ben Cardin, D-Md., to Mnuchin and Carranza in a letter signed by all 47 Senate Democrats and independents who caucus with Democrats. It was delivered Friday.
The senators expressed concern that current form, which is eleven pages long, “is especially burdensome, time-consuming, and costly for very small and underserved businesses, including microbusinesses, sole proprietorships, rural, and minority-owned small businesses.” They worried those businesses “will feel compelled to hire accountants and attorneys to complete the forgiveness form in a manner that provides comfort that the loans will be forgiven.”
The program was initially rolled out in April, offering $349 billion to small businesses forced to shutter or curtail operations as the coronavirus spread. After those funds quickly ran out, the government replenished the program with an additional $310 billion. It offered companies forgivable provided a company maintains its employee and compensation.
Since the coronavirus pandemic began, more than 44 million workers have filed for unemployment.
As of early June, more than $120 billion of the additional $310 billion allotted to the program had yet to be used, sparking concern its design may be insufficient the businesses it is intended for. The program was also gone through several rounds of guidance, causing some critics to deem it too confusing or daunting for prospective applicants.
The senators also urged that the treasury include a section in an updated, streamlined loan forgiveness form to collect data, including demographic information, to ensure that minority owners had sufficient access to the funds.