Washington, D.C. — The Consumer Bankers Association and Bank Policy Institute today called on Congress to pass legislation automatically forgiving Paycheck Protection Program loans of $150,000 and less. Approximately 85 percent of all PPP loans would be eligible for this automatic forgiveness.
Requiring the 3.7 million eligible PPP recipients in this category to simply verify funds were used in accordance with program guidelines, instead of completing lengthy forgiveness forms released by the Small Business Administration, would collectively save up to 70 million hours of paperwork for small business owners and approximately $7.4 billion, which could be allocated to reopening costs and other business measures.
A full copy of the associations’ letter is available here.
“These small businesses and their employees are the backbone of our nation’s economy and communities. Their time and resources would be better focused on getting the economy safely back up and running, not processing burdensome paperwork,” the associations wrote.
Loans less than $150,000 account for 85 percent of total PPP loans but less than 26 percent of PPP loan dollars. The overwhelming majority of these small businesses, those who qualify for $150,000 in PPP funds based on 2.5 times monthly payroll, do not have full-time financial professionals on their payroll. These small business owners would be required to pay a third party or attempt to complete the paperwork on their own, which could take anywhere from 20-100 hours based on analysis from AQN Strategies. AQN also estimates each forgiveness application would average $2,000 per loan.
The AQN Strategies analysis can be found here.
About the Bank Policy Institute. The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.