June 3, 2020
By Caity Witucki
Contributing Editor, C-Suite Wednesday
C-Suite Wednesday – House Calls for a Simplified PPP Forgiveness Application
On May 28, 2020, Kentucky Congressman, Andy Barr, and Arkansas Congressman, French Hill, submitted a formal letter to the U.S. Department of Treasury and the U.S. Small Business Administration urging them to simplify the Paycheck Protection Program (PPP) loan forgiveness application. This effort comes in response to small business owners’ concerns that the current complexity of the forgiveness application might force mom and pop small businesses to hire expensive legal and accounting aid.
“Small businesses don’t need additional costs and red-tape as they battle back from the COVID-19 related shutdown of our economy. That is why I have written a letter to Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza requesting that the loan forgiveness application for loans $350,000 or less be simplified,” says Congressman Barr. “Much like how the IRS relies on Form 1040 EZ for taxpayers with relatively straightforward tax filings, Treasury and the SBA should create a streamlined forgiveness application for small business loans below the dollar threshold.”
According to recent SBA data, approximately 93% of the PPP loans to date have been for $350,000 or less. Therefore, the vast majority of borrowers would be able to use the simplified application and the more complex review would be reserved for larger businesses, many of whom have legal and accounting departments.
“Treasury has already pledged to fully audit loans in excess of $2 million,” says Congressman Barr. “This request would not preclude Treasury and SBA from conducting oversight over the funds, or otherwise auditing any loan. But a streamlined forgiveness application would ease the burden on both borrowers and lenders of smaller PPP loans, consistent with congressional intent, while at the same time allowing Treasury and the SBA to focus its scarce and valuable resources on the program’s higher risk and larger dollar-value loans.”
Read the full letter to Treasury Secretary Mnuchin and SBA Administrator Carranza here.