Loan Necessity Questionnaires – Borrower & Lender Coalition Letter to SBA & Treasury

Dear Majority Leader McConnell, Speaker Pelosi, Democratic Leader Schumer and Minority Leader McCarthy:

We, the undersigned associations representing thousands of banks, credit unions, financial institutions, nonprofits and businesses of all sizes that serve America’s consumers, write to urge you to immediately address the overburdensome Paycheck Protection Program (PPP) forgiveness process before the end of the year. Congress can solve this problem and inject the equivalent of $7 billion into our economy by passing bipartisan, common-sense legislation to streamline PPP forgiveness for small businesses on Main Street in communities across the country.

We encourage Congress to quickly consider legislation that will help countless businesses navigate the overly complex forgiveness process. 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 are bipartisan and bicameral legislation introduced earlier this Congress and would reduce compliance costs by streamlining the forgiveness process for mom-and-pop businesses who received PPP loans during these unprecedented times. Additionally, passing such legislation that would expand the hold harmless protections for lenders will provide financial institutions that originated and currently service PPP loans the opportunity to focus their time and energy on providing much-needed credit and financial services to individuals and businesses by creating regulatory certainty for PPP loans in the future.

The PPP forgiveness process has already begun for banks and will continue for them and for millions of American businesses in the coming months. Businesses have been patiently awaiting for Congress to act, hoping that an improved and streamlined forgiveness process will ensure they can focus their time, energy, and resources back into their business and communities instead of allocating significant time and expense 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 legislation that would forgive PPP loans of less than $150,000 upon the borrower’s completion of a simple, one-page forgiveness document. 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.

Data provided in an independent analysis by AQN Strategies (AQN) has shown an estimated benefit of issuing auto-forgiveness for various loan size thresholds.[1] 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.

On behalf of our members and the millions of small businesses we serve, we urge you to improve the PPP forgiveness process and support streamlined forgiveness efforts. Financial institutions across the country stand ready to service a second round of PPP loans for our small business and nonprofit customers, but Congress must act now in order to ensure a second round of funds reach those most severely impacted expeditiously. Time is of the essence and we look forward to working with you to pass these critical bills. Thank you for your strong, common- sense leadership on such a critical issue.

Sincerely,

American Bakers Association American Bankers Association

American Council of Engineering Companies American Financial Services Association American Frozen Food Institute

American Hotel & Lodging Association American Institute of CPAs

American International Automobile Dealers Association American Lighting Association

American Mold Builders Association

American Road & Transportation Builders Association American Society of Association Executives

American Staffing Association America’s SBDC

Asian American Hotel Owners Association Associated Builders and Contractors Associated Equipment Distributors Associated General Contractors of America Bank Policy Institute

Community Development Bankers Association Construction Industry Round Table

Consumer Bankers Association Convenience Distribution Association Credit Union National Association Farm Credit Council

Financial Executives International

Foodservice Equipment Distributors Association Gases and Welding Distributors Association Glass Packaging Institute

Global Business Travel Association

Heating, Air-conditioning & Refrigeration Distributors International Independent Community Bankers of America

Independent Electrical Contractors

Independent Insurance Agents & Brokers of America Industrial Fasteners Institute

Institute of Scrap Recycling Industries, Inc. International Association of Movers International Council of Shopping Centers International Dairy Foods Association

International Foodservice Distributors Association International Franchise Association

Mortgage Bankers Association

National Association of Federally-Insured Credit Unions National Association of Government Guaranteed Lenders National Association of Home Builders

National Association of Manufacturers

National Association of Wholesaler-Distributors National Bankers Association

National Community Pharmacists Association National Cooperative Business Association CLUSA National Council of Farmer Cooperatives

National Electrical Contractors Association National Fastener Distributors Association National Funeral Directors Association National Marine Distributors Association, Inc. National Marine Manufacturers Association National Mining Association

National Ready Mixed Concrete Association National Restaurant Association

National Roofing Contractors Association National Small Business Association National Tooling and Machining Association National Wild Turkey Federation

NFIB

North American Association of Food Equipment Manufacturers North American Die Casting Association

Outdoor Power Equipment and Engine Service Association, Inc. Precision Machined Products Association

Precision Metalforming Association Professional Beauty Association Project Management Institute

S Corporation Association

Small Business & Entrepreneurship Council Small Business Investor Alliance

Society of Collision Repair Specialists Southeastern Lumber Manufacturers Association Specialty Equipment Market Association

The Metals Service CenterInstitute Tile Roofing Industry Alliance Tire IndustryAssociation

U.S. Chamber of Commerce

Wine & Spirits Wholesalers of America


[1] www.federalregister.gov/documents/2020/10/26/2020-23594/reporting-and-recordkeeping-requirements-under-omb-review#h-8