US to forgive PPP loan after borrowers complaint

WASHINGTON – The Treasury Department on Tuesday said it would begin waiving loans given to small traders under the Paycheck Protection Program following complaints from banks and borrowers.

A Treasury spokesman said the government hopes to approve the amnesty requests by the end of this week or until the next morning. Applications are generally expected to be approved quickly, with the exception of loans above $ 2 million to be added.

Business advocates, banks and lawmakers have expressed concern that the process of converting loans into grants under the $ 670 billion federal program is too complex and slow, with small businesses pardoning government-backed loans to help respond to the economic collapse of the epidemic Is designed to do. Through banks.

“The ultimate success of the program will depend on forgiveness, so small-business owners are eager to learn [Treasury officials’] The decision, ”says Kevin Culman, senior director of government relations for the National Federation of Independent Businesses, who advocates for small businesses, says the group welcomes the development.

Since it launched an online portal for debt forgiveness in early August, the Small Business Administration has received more than 96,000 applications from businesses to forgive their debts – but none were approved, William Manger, SBA Chief of Staff and Associate Administrator, said House MP last week.

Those applications represent about 2% of the 5.2 million loans, valued at $ 525 billion, released under the program before it expired on August 8.

The treasurer’s announcement comes amid a string of calls for additional small-business assistance as many Kovid-19s grapple with the effects of the pandemic.

Approximately $ 130 billion has not remained in PPL funding since the program concluded last month, but lawmakers have yet to take into account how it should be used for additional small-business relief. The main policy under discussion is allowing small businesses to get out of the crisis, especially to obtain a second PPP loan, a move that would require their first loan to be forgiven.

Separately, lawmakers in both the House and Senate have introduced legislation to streamline forgiveness for PPP loans of less than $ 150,000, providing blanket forgiveness to borrowers with a simple verification that the funds are used in accordance with the guidelines it was done.

Banking lobbies and some small-business advocacy groups are emphasizing the law, over concerns that the amnesty process is too much.

“It’s actually more complicated than any of us,” said Jack Murphy, president of business banking at Citizens Financial Group.,

Speaking on Tuesday at a conference of the Consumer Bankers Association. “We are taking two weeks to process an application. Four to six contacts between small-business owners … and those attempting to process amnesty applications. ”

Treasury Secretary Steven Menuchin told Senate lawmakers last week that he would support a simplified amnesty but required legislation. He also said that the administration wants to monitor the loan for fraud.

Meanwhile, Mr Mnuchin urged the business owners to apologize if they are willing to do so.

“I would encourage them to move quickly and fill up and not wait for legislation,” he told a Senate banking committee on Thursday.

Although some recent surveys have shown that sentiments among some small businesses have intensified again, many continue to struggle.

According to NFIB’s end-of-August survey, one in five small businesses said they would have to close their doors if the economic situation did not improve in the next six months. Most PPP borrowers surveyed it, or 84%, said they have now used the entirety of previously obtained loans, and 44% said they would apply for a second PPP loan if they become available or Will apply from

According to Yelp Inc.

As of 31 August, 163,735 US businesses have been closed on its review website, an increase of 23% from 10 July. 60% of those businesses are permanently closed.

Write Yuka Hayashi at [email protected]

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