Spanberger, Horn urging Treasury, SBA to fix PPP issues
Abigail Spanberger, D-Va., and Kendra Horn, D-Okla., are leading an effort calling on the SBA and Department of the Treasury to take immediate steps to encourage additional lenders to issue Paycheck Protection Program loans to small businesses struggling due to the COVID-19 pandemic.
The PPP—launched last Friday—is meant to distribute fully forgivable loans for businesses to cover payroll costs, mortgage interest, rent, and utilities. However, small business owners have reported many barriers since the opening of the PPP program—including lenders refusing to take new applications for PPP loans and lenders subjecting businesses to additional, burdensome requirements.
Additionally, if a business’ primary lender does not accept their PPP application because they do not meet that lender’s preference, they are left with nowhere to turn—as most lenders require previously established relationships as part of the application criteria.
Unfortunately, these barriers might appear insurmountable to many small businesses, particularly as the PPP has a limited amount of funding that is being distributed on a first come, first served basis.
In a letter sent to U.S. Treasury Secretary Steven Mnuchin and U.S. SBA Administrator Jovita Carranza, Spanberger and Horn expressed their concerns about the PPP’s shaky rollout and its consequences for small businesses needing financial assistance during the coronavirus pandemic.
Additionally, the lawmakers called on the SBA and the Treasury Department to provide additional guidance to PPP lenders that would clarify eligibility requirements and encourage lenders to provide PPP loans to all eligible businesses.
“We were shocked and disappointed to learn that, contrary to Congressional intent, individual qualified lenders have been demanding additional requirements of businesses that wish to apply for a loan, including an existing small business relationship between the lender and the business,” said Spanberger, Horn, and their colleagues. “We ask that the SBA and the Department of Treasury provide additional guidance to PPP lenders that would clarify eligibility requirements and encourage lenders to provide PPP loans to all eligible businesses.