As Congress negotiates a new round of coronavirus relief, including an extension of the Paycheck Protection Program, the American Bankers Association and several other banking groups urged senators to provide clarity and enhancements in the legislative text. While the groups welcomed the Continuing Small Business Recovery and Paycheck Protection Program Act, which expands “hold harmless” protections for lenders and streamlines the PPP forgiveness process, they urged senators to provide additional specificity on calculations and documentation.
“We believe such clarity would provide significant benefits to borrowers and lenders if changes made in your legislation, are fully implemented at one time, to ensure consistency and reliable rules that all parties can depend on when the loan process restarts,” they said, noting that nearly two dozen interim final rules and numerous FAQs “have only made the program more complicated for small businesses who do not have the resources to constantly update or amend applications.”
Noting the bill’s provisions addressing a level of reduced revenue required for eligibility for a second PPP loan, the groups urged Congress to allow lenders to rely on applicant attestations of eligibility. “If the agencies determine a lender is responsible for reviewing submitted documentation supporting a small business’ claim for a decline in revenue (i.e. income statement), applying for and processing these loans will be significantly taxing for both small businesses and lenders,” the groups added. Read the letter.