The Paycheck Protection Small Business Forgiveness Act

June 30, 2020

Source: Kevin Cramer, U.S. Senator for North Dakota

Banking Committee Members Introduce Bipartisan Bill to Streamline Forgiveness of PPP Loans for Small Businesses

U.S. Senators Kevin Cramer (R-ND), Bob Menendez (D-NJ), Thom Tillis (R-NC) and Kyrsten Sinema (D-AZ), Senate Banking Committee members, today introduced the “Paycheck Protection Small Business Forgiveness Act,” bipartisan legislation to streamline forgiveness of Paycheck Protection Program (PPP) loans for small businesses.

“We can avoid the burdensome cost of superfluous bureaucracy required to arrive at the foregone conclusion of loan forgiveness by implementing a few commonsense changes,” said Senator Cramer. “The Paycheck Protection Small Business Forgiveness Act would give small businesses peace of mind by eliminating unnecessary bureaucratic requirements and simplifying the process for forgiving smaller loans. I urge my colleagues to support it and to consider including it in any future relief package.”

“Small businesses across New Jersey and the country are doing everything they can to withstand the economic impact of this unprecedented pandemic. And, for many of them, PPP loans have been their only available lifeline to keep their doors open. We want them to succeed. We want them to keep people employed and keep serving their communities,” said Sen. Menendez. “The bipartisan Paycheck Protection Small Business Forgiveness Act cuts these struggling small businesses a break when they need it most by providing them full forgiveness on PPP loans of $150,000 or less.  Automatically forgiving PPP loans for these small businesses allows them to focus their limited resources on keeping their business going and makes it easier for them to have their PPP loans forgiven. I would urge my colleagues on both sides of the aisle to support this commonsense legislation.”

“The Paycheck Protection Program played a crucial role in supporting small businesses and saving jobs for hardworking North Carolinians,” said Senator Tillis. “I am proud to co-introduce this bipartisan legislation that will help small businesses save thousands of dollars to ask for forgiveness for their PPP loan and use those funds to help re-start our economy.”

“Fully forgiving Arizona small businesses’ PPP loans provides needed economic certainty to local employers—which have suffered losses through no fault of their own—while protecting Arizonans’ jobs and paychecks,” said Senator Sinema.

The Paycheck Protection Small Business Forgiveness Act includes forgiveness for PPP loans of $150,000 or less if the borrower submits a simple, one-page attestation form to the lender. It also ensures the lender will be held harmless from any enforcement action if the borrower’s attestation contained falsehoods.

The approximately 3.7 million PPP loans of $150,000 or less account for 85 percent of all PPP approved loans but only 26 percent of the PPP funds delivered. The cost of applying for forgiveness for a PPP loan of this size is $2,000 for the small business and $500 for the lender. The bipartisan legislation introduced today could save small businesses $7.4 billion and banks nearly $2 billion.

National Support

The legislation is supported by leading banking groups, as well as members of the agricultural community, who applauded its introduction.

“The current forgiveness application is unnecessarily burdensome for many businesses, particularly the smallest of small businesses without the administrative support needed to complete the form. Small businesses and their employees are the backbone of our nation’s economy and communities,” said Consumer Bankers Association President and CEO Richard Hunt. “This bipartisan automatic forgiveness process will allow businesses to focus their time and resources on seeing customers and hiring employees instead of hiring consultants to fill out paperwork.”

“Providing a safe-harbor for smaller PPP loan forgiveness is a top priority for the ICBA,” said Paul Merski, Executive Vice President of the Independent Community Bankers Association. “ICBA appreciates and supports the needed relief these senators are advancing on PPP loan forgiveness and it will help both small businesses and lenders better serve their customers and communities.”

“America’s credit unions wholeheartedly support the Paycheck Protection Small Business Forgiveness Act,” said Credit Union National Association President and CEO Jim Nussle. “This bill will allow America’s small business owners and Main Street financial institutions to remain focused on serving their communities rather than on jumping through burdensome regulatory hurdles.”

“Farm Credit is grateful to these senators for introducing this common sense legislation,” Todd Van Hoose, CEO of the Farm Credit Council. “It will greatly simplify the Paycheck Protection Program loan process for farmers impacted by the Covid-19 pandemic and ensure they get those loans forgiven quickly as intended.”

Local Support

Banking and agricultural leaders in North Dakota also voiced their support for the bill.

“I appreciate Senator Cramer introducing loan forgiveness legislation for those smaller businesses that are challenged with the cumbersome process to qualify for legitimate forgiveness,” Agriculture Commissioner Doug Goehring said. “It would be especially helpful for agricultural operations where certain expenses are more difficult to plug in since agriculture is defined on an annual basis.”

“The North Dakota Bankers Association supports Senator Cramer and his efforts to reduce the unnecessarily burdensome PPP loan forgiveness process on our nation's small businesses,” said Rick Clayburgh, President and CEO of the North Dakota Bankers Association. “The Paycheck Protection Small Business Forgiveness Act will serve the interests of small business owners, taxpayers, and the policy objectives established by Congress, by making the loan forgiveness process easier and less technical for smaller borrowers, whose businesses are already at greatest risk because of COVID-19.”

Because the forgiveness rules and procedures that have been outlined for small businesses and lenders are far too complex, small-business borrowers and lenders alike need reforms such as those outlined in Senator Cramer’s bill to ensure PPP loans are the economic lifeline that Congress intended,” said Barry Haugen, President of the Independent Community Banks of North Dakota.

“The Paycheck Protection Program (PPP) successfully delivered over $1.7 billion in vital financial assistance to over 19,500 North Dakota small businesses. The success of the PPP will be determined ultimately on whether small business owners receive loan forgiveness. An increasing number of small business owners will be applying for forgiveness as they expend their PPP funds over the summer,” said Alison Ritter, the North Dakota State Director for the National Federation of Independent Business. “This bill will provide a more efficient way to demonstrate compliance and receive forgiveness as small businesses re-open and work to recover from this unprecedented economic and public health crisis. NFIB thanks Senator Cramer for introducing legislation that will save small business owners time, money, and resources during that process.”

“We greatly appreciate Senator Cramer’s leadership on this important legislation.  The Paycheck Protection Program is providing much needed COVID 19 related relief for North Dakota farmers and ranchers, and this legislation will provide more efficient and timely administration of related and intended loan forgiveness,” said FCS of North Dakota’s Gordon Hanson, AgCountry FCS CEO Marc Knisely, and FCS of Mandan CEO Aaron Vetter in a joint statement.

Click here for bill text.