September 1, 2021

By Joseph Coleman
Contributing Editor

WASHINGTON — House Small Business Committee testimony from SBA lenders and small business advocates focused on answering an important looming question, “What Comes Next for PPP Forgiveness?”

Committee members on both sides of the aisle praised the public-private partnership between the U.S. Small Business Administration and the SBA lending community for taking extraordinary tasks while getting access to capital to small businesses during the pandemic.

Representative Claudia Tenney (R-NY) said, “My staff and many of our constituents came to us and were concerned with the problems they had with SBA. The fact that we have wonderful institutions like community banks and credit unions that serve customers so directly, I think that’s a huge win.”

Chairwoman Velázquez (D-NY) said, “During the first tranche, the data we didn’t get from the Administration now shows that many small businesses in underserved communities were not able to access PPP money because they did not have pre-existing banking relationships. The big banks did not lend to those small businesses. It wasn’t until we intervened and we demanded from the Secretary of the Treasury to set aside money for mission based lenders. The same is true now with the great work that the SBA is doing in informing small businesses with what they need to do in order to fill out the forms and take every step for their loans to be forgiven.”

Leslie Payne, AVP of Commercial Lending, Affinity Federal Credit Union, shared a direct testimonial from one of their members that was recently forgiven saying, “Hopefully you are able to hear our screams of delight. Thank you so much, this is an enormous relief. Please let everyone know how important this is to us. Affinity’s communications, systems, responsiveness, and empathy during really trying times was second to none. You guys rock!”

HEARING TALKING POINTS

PPP to Underserved Communities (1:07)

Forgiveness Lender Audits (0:48)

PPP Fraud (0:27)

SBA Bureaucracy and PPP (0:32)

PPP Challenges for Borrowers (2:05)

SBA Lenders PPP Customer Support (0:40)

Forgiveness Testimonial (0:28)

What is Next for PPP? (0:45)

SBA Bureaucracy and PPP

Committee members praised the partnerships forged between SBA and the lending community but were critical on some of the regulatory steps taken by SBA.

Robert Fisher, President and CEO, Tioga State Bank, Chairman of ICBA, said, “We received communication from SBA that there was potential for an audit if you did not participate in the forgiveness portal. From day one we decided we wanted to be that interface between our customers and the SBA because it is a very confusing and complicated process. We feel that we have the expertise that the customer doesn’t. We want to control that relationship and help our customers navigate throughout this whole forgiveness process.”

Representative Jim Hagedorn (R-MN) said, “I was a congressional relations officer at Treasury for 18 years so I have seen the bureaucracy a little bit. I think this move by SBA to gain some control back of the PPP, when it was actually run very well through the banks, might be an effort to retain their turf. They see the writing on the wall that if we turn over the EIDL loans and others to the banks, where we can minimize fraud and do better for our customers, they are going to lose some of their power.”

What is Next for PPP?

When asked about the next steps for PPP, ICBA Chairman Robert Fisher said, “I think the big concern now is what is going to happen with this next wave? If it’s going to lead to shutdowns. We are seeing mask mandates for schools. There is a lot of uncertainty with business which is always problematic.”

Marla Bilonick, President and CEO, National Association of Latino Community Asset Builders, said, “From our perspective there is a lot of concern around workforce. There is just not available workforce for a lot of the industries that were hardest hit and that are now trying to reopen and reboot.”

Conclusion

Approximately a year and a half into the COVID-19 pandemic, the small business economy has slowly rebounded, but remains in a fragile state, especially as the Delta variant continues to spread, and some communities deal with lower vaccination rates. Though PPP effectively preserved millions of jobs and thousands of businesses, the program is in its most important phase – that which makes good on the promise made by the federal government that these loans could be easily forgiven and thus converted into grants. To that end, Congress will remain vigilant of the obstacles faced by PPP borrowers in accessing full loan forgiveness and will continue considering program rule changes that may be needed to maximize full loan forgiveness, especially for small-dollar borrowers.

HEARING SOURCES

What Comes Next? PPP Forgiveness
Wednesday, September 1, 2021 | 1:00 PM

To view the full hearing, please click here (2:20:45)

Hearing Notice
Hearing Memo

WITNESSES

Ms. Tracy C. Ward
Director of the SBA 504 Loan Program
Self-Help Ventures Fund
Durham, NC
Testimony

Ms. Leslie Payne
Assistant Vice President of Commercial Lending
Affinity Federal Credit Union
Basking Ridge, NJ
*Testifying on behalf of the National Association of Federally Insured Credit Unions
Testimony

Ms. Marla Bilonick
President and Chief Executive Officer
National Association for Latino Community Asset Builders
Washington, DC
Testimony

Mr. Robert Fisher
President and Chief Executive Officer, Tioga State Bank
Chairman, Independent Community Bankers of America (ICBA)
Spencer, NY
Testimony