Due to a lack of guidance regarding the loan forgiveness provisions in the Paycheck Protection Program (PPP), Sen. Bernie Sanders (I-Vt.), Sen. Patrick Leahy (D-Vt.), and Rep. Peter Welch (D-Vt.) recently sent a letter urging Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza to provide clear and official instructions about the provisions in the program.
In the letter, the legislators wrote, “We encourage Treasury and the SBA to act now to avoid more confusion for small business owners and lenders. This week, the second round of funding became available and many businesses are now making the decision to either apply for the program, and risk that their loans will not be forgiven creating more financial hardship, or walk away from a program which may provide much needed relief during this unprecedented crisis.”
Although the PPP has been popular and helpful in Vermont, with nearly 7,000 businesses approved for over $1 billion in loans during the first round of funding, small businesses remain concerned about the lack of guidance and flexibility from the federal agencies to ensure that they can have the loans forgiven.
The lawmakers have also heard from Vermont businesses concerned about their inability to rehire employees in the short PPP coverage period, that the current PPP loan guidelines are overly restrictive, and that the loans may not fully account for the extensive financial losses they are experiencing due to the coronavirus (COVID-19) pandemic. The letter urges the Department of Treasury and SBA to address these issues for small businesses in Vermont and across the country.
Lastly, the letter asks for a detailed explanation on the steps taken to fix the SBA E-Tran system that failed as banks submitted applications for the second round of PPP loans last week.