Small Business Administration Focuses On Canceling PPP Loans
Designed as part of the stimulus package at the start of the COVID-19 pandemic, PPP loans have been made available to businesses with 500 or fewer employees and designed to be forgiven as long as businesses keep their employees on the payroll. .
With new PPP loans halted pending further action from Congress, the federal agency is now focused on canceling loans, said Rob Scott, the SBA’s regional administrator for the Great Lakes region.
Yet, many companies and lenders have requested automatic or simplified forgiveness for those who loans of $ 150,000 or less. Scott, a person appointed by President Donald Trump, acknowledged this, but said these are steps that need to be taken by policymakers.
“Again, I think this is a wait-and-see approach from Congress,” Scott told reporters. “But we’ve heard the exact same thing from lenders and borrowers that $ 150,000 and under would be great. That would encompass 85% of all P3 loans across the country.”
Scott told reporters it would likely be early November before the agency had data on pardon rates for businesses. So far, he said, the SBA has mostly caught “minor” errors on forgiveness apps, such as misplaced decimal points, that needed corrections.
Banks, he said, have so far given mostly positive feedback on the forgiveness process.
Discussions about an additional stimulus for businesses, individuals as well as state and local governments have been rife for months. But policymakers have yet to reach consensus on the scale and scope of any further relief. It is unclear whether they will do so before Trump or former Vice President Joe Biden takes office in January.
Scott told Crain’s that in the Great Lakes region he oversees, hospitality businesses, especially restaurants, are gearing up for a tough fall and winter as al fresco dining becomes much more. difficult.
“So they’re looking to political leaders to, you know, do something in Washington to give them a lifeline for their business,” Scott said. “So we hear from the restaurant industry, we hear from entertainment venues… that have been very affected by some of the orders of governors and various states that have like, hushed up their affairs. not questioning the governors’ orders. I’m just stating the facts, but that’s what we’re hearing and they need more help. ”