ACA, Coalition Urge Congressional Action on PPP Forgiveness Legislation


Last month, ACA signed onto a coalition letter sent a letter to the Congressional leadership, urging passage of S. 4117,  The Paycheck Protection Program Small Business Forgiveness Act, sponsored by Senators Kevin Cramer, Bob Menendez, Thom Tillis and Kyrsten Sinema, and H.R. 7777, The Paycheck Protection Small Business Forgiveness Act, sponsored by Reps. Chrissy Houlahan and Fred Upton. The letter was signed by more than 100 trade associations and groups representing thousands of banks, credit unions, financial institutions and businesses.

The bills would streamline the forgiveness process for mom-and-pop businesses who received Paycheck Protection Program loans during these unprecedented times, and have broad support. At this writing, both bills were awaiting action in their respective chamber committees related to Small Business.

The Paycheck Protection Program (PPP), established by Congress, provided millions of small businesses the economic relief they needed to meet the challenges posed by the COVID-19 crisis. Now that the program has ended, small business owners and nonprofits are facing the challenges of reopening local economies in a time of uncertainty, retooling their businesses, working to protect the health of both customers and employees, and serving the needs of the community. Small businesses across the country are facing the time-consuming and costly process of applying for PPP loan forgiveness.

ACA strongly believes that S. 4117 and H.R. 7777 ensure those businesses can focus their time, energy, and resources back into their business and communities instead of allocating significant time and resources into completing complex forgiveness forms.

“America’s small businesses, and the millions of men and women who work at them, are the foundations of communities across the country and the economy and in order to assist them, we urge Congress to quickly pass these pieces of legislation that would forgive PPP loans of less than $150,000 upon the borrower’s completion of a simple, one-page forgiveness document,” the coalition letter stated.

“PPP loans of $150,000 and under account for 87 percent of total PPP recipients, but less than 28 percent of PPP loan dollars. Expediting the loan forgiveness process for many of these hard-hit businesses would save more than $7 billion and hours of paperwork.”

The coalition cited data provided in an independent analysis by AQN Strategies (AQN) showing an estimated benefit of issuing auto-forgiveness for various loan size thresholds. “AQN anticipates the combined resource requirements of operators’ time and/or third-party expenses to represent an effective cost of $2,000–4,000 for each business that applies for forgiveness, requiring 20–100 hours of focused time from key leaders of these businesses. With an average loan size of less than $19,000 for the smallest 60% of loans, this estimate would represent 10–20% of the loan amount itself, which is otherwise intended to support payroll, rent, and other obligations necessary to keep businesses alive and ready to restart. In addition, AQN’s analysis suggests that the cost to businesses and lenders would be lower than the cost for the government to auto-forgive loans.”

ACA and the coalition members urged Congress to improve the PPP forgiveness process and support S. 4117 and H.R. 7777.

Contact ACA’s Heidi McAuliffe for more information.


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