The application for loan forgiveness in the Paycheck Protection Program is far too complex and could result in businesses using much-needed funds to hire attorneys and accountants to help them fill out the document, CUNA and state credit union leagues warned Friday.
“Creating an overly complex forgiveness process would seem to be the antithesis to the spirit of a program designed to rapidly deploy resources to small business especially when the expectation is that the funds appropriated to PPP were never expected to be repaid,” CUNA President/CEO Jim Nussle and state league presidents wrote in a letter to Small Business Administration and Treasury Department officials.
Many of the calculations on the forgiveness application are extremely complex, they said. In their letter, Nussle and the leagues suggested that the Trump Administration revamp the forgiveness application for loans under $350,000 and simplify it even more for loans under $50,000.
They pointed out that some credit unions have reported making PPP loans to members for less than $1,000.
Congress has been struggling with proposals to revamp the PPP program to give borrowers more flexibility. Last week, the House passed bipartisan legislation to allow borrowers to spend loan proceeds over a longer period of time. The measure also increased the share of the loans that may be used for non-payroll purposes.
The Senate this week may consider its own legislation to provide more flexibility. The House is not expected to be in session until later this month as members hold remote markups and hearings, so unless the Senate simply accepts the House-passed measure, changes to the PPP program likely will have to wait. However, House Democratic leaders have left open the possibility they could call enough members back to Washington to form a quorum for crucial votes.