Today, Representative John Curtis (R-UT) and Representative Derek Kilmer (D-WA) led a letter, supported by 40 of their colleagues, to the Small Business Administration (SBA). The bipartisan group of lawmakers championed support for small businesses and requested further guidance related to loan forgiveness for the Paycheck Protection Program (PPP). While SBA issued an application and instructions for the PPP last Friday, further clarity will help save jobs and small businesses by ensuring the PPP can be fully utilized.

“Many small businesses took these loans with the understanding that they would be forgiven if they maintain their workforce for a set period of time, in addition to other terms. While we have an unclear timeline of when the American economy will begin to flourish as it did before this pandemic, flexibility will be vital to ensure employers who took PPP loans are able to meet the terms that are required to ensure these loans are forgiven.”

Cosponsors of the letter also include:

Representatives Adam Smith, Brian Fitzpatrick, Joe Wilson, Eleanor Holmes Norton, Lisa Blunt Rochester, Rodney Davis, Vicente Gonzalez, Darren Soto, Jeff Duncan, Ben McAdams, Anthony Brindisi, Jeff Fortenberry, Bill Foster, Denny Heck, Ami Bera, M.D., Marc Veasey, Mike Gallagher, Peter Welch, Ed Case, Brian Mast, Louie Gohmert, Bill Johnson, Bradley Byrne, Rob Bishop, Elissa Slotkin, Jerry McNerney, Elaine G. Luria, Harley Rouda, Chris Stewart, Jim Costa, Scott H. Peters, Elise M. Stefanik, Suzan DelBene, Tom Cole, H. Morgan Griffith, Joseph D. Morelle, Abby Finkenauer, Jimmy Panetta, and Jackie Walorski.

Statement of Support

Kevin Kuhlman, Vice President, NFIB Federal Government Relations:

“The Paycheck Protection Program has been a valuable financial assistance program for small businesses during the unprecedented disruption caused by the COVID-19 pandemic. However, small business owners need answers to questions on forgiveness and additional flexibility in the program. NFIB thanks Congressmen Curtis and Kilmer for pursuing these important answers and flexibility and looks forward to working with them to improve the program and help small businesses survive this crisis.”

Full text of the letter available here:

Dear Administrator Carranza, 

The CARES Act created the Paycheck Protection Program (PPP) which enables lenders to offer 100% SBA guaranteed loans for eligible small businesses to help meet certain payroll and operating costs. This program has proved very popular and helped save countless American jobs during the immediate period of economic uncertainty caused by the COVID-19 pandemic.

Many small businesses took these loans with the understanding that they would be forgiven if they maintain their workforce for a set period of time, in addition to other terms. While we have an unclear timeline of when the American economy will begin to flourish as it did before this pandemic, flexibility will be vital to ensure employers who took PPP loans are able to meet the terms that are required to ensure these loans are forgiven.

Many businesses are unable to operate due to mandatory government orders, and it is unclear in many states when they will be able to reopen their doors. Failure to forgive PPP loans would only further harm small businesses in America, putting them further in debt than had they tried to survive the economic disruption through alternative options. Last Friday, SBA issued an application and instructions for the PPP, which answered certain questions related to loan forgiveness. But other uncertainties remain, and SBA indicated they will soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.

Therefore, we request that you respond to the following questions:

1)      Lenders and small business owners lack answers to loan forgiveness requirements in large part because SBA has not issued regulations and guidance. The Interim Final Rule states, “SBA will issue additional guidance on loan forgiveness.” We urge SBA to issue guidance as soon as possible, as PPP loans are being approved and distributed. When will the SBA release forgiveness guidance?

2)      The Interim Final Rule states, “Limiting non-payroll costs to 25 percent of the forgiveness amount will… help to ensure that the finite appropriations available for PPP loan forgiveness are directed toward payroll protection.” Congress recently appropriated an additional $310 billion for PPP loans. Congress intended for businesses to maintain payroll, but Congress did not intend that 75 percent of the loan would be required for payroll. This limitation may not work for many small businesses, especially those with relatively small payrolls. Do you have the flexibility to work with small businesses that took out these loans to maximize loan forgiveness and remove the 75 percent limitation?

3)      Based on current trends and forecasting, what percentage of these loans do you anticipate will NOT be forgiven?

4)      What are the primary reasons you anticipate a loan will be denied forgiveness?

5)      How can Members of Congress, banks, credit unions, associations, and other outlets help inform PPP participants of best practices to ensure loan forgiveness?

Thank you for your work to ensure the success of small businesses impacted by COVID-19 and the implementation of the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act. Thank you again for your consideration of our request.

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