Changes will help businesses already at greatest risk because of COVID-19
Nashville—The Tennessee Bankers Association, along with 18 statewide business associations and economic development organizations, asked the U.S. Treasury and Small Business Administration to streamline the loan forgiveness process for small businesses that received loans through the Paycheck Protection Program.
In a letter to U.S. Treasury Secretary Steven Mnuchin and Small Business Administrator Jovita Carranza, the groups said the loan forgiveness process outlined in recent guidance is unnecessarily burdensome on Tennessee’s small businesses. They are concerned the loan forgiveness process will require even the smallest PPP borrowers to hire outside experts to realize the purpose of the program and receive forgiveness of their PPP loans. Additionally, the complexity could open up small businesses to unnecessary liability.
“Businesses will struggle to complete these applications in a timely manner because of this technical and burdensome process,” said Colin Barrett, president and CEO of the Tennessee Bankers Association. “It is in the best interest of Tennessee small business owners to make the loan forgiveness process easier and less technical for smaller borrowers, whose businesses are already at greatest risk because of COVID-19.”
The groups want a de minimis threshold of $250,000, under which borrowers with outstanding loans may receive 100% PPP loan forgiveness through completion of a “PPP-EZ form.” This form would acknowledge the businesses spent the majority of PPP funds as outlined in the guidance and consistent with their PPP application. Borrowers could still be asked to maintain documentation in the case of an SBA audit in future years.
Established by the CARES Act, the PPP is a loan program designed to provide a direct incentive for small businesses affected by the coronavirus pandemic to keep workers on their payrolls. SBA will forgive loans if the funds are used for payroll, rent, mortgage interest or utilities.
Through June 6, $8,771,375,365 in PPP loans were made to 86,647 Tennessee small businesses and self-employed individuals.
The following organizations joined TBA in calling for changes to the loan forgiveness process:
American Council of Engineering Companies of Tennessee
Chattanooga Area Chamber of Commerce
Insurors of Tennessee
Johnson City Chamber of Commerce
Kingsport Chamber of Commerce
Nashville Area Chamber of Commerce
The Beverage Association of Tennessee
Tennessee Association of Rescue Squads
Tennessee Chamber of Commerce and Industry
Tennessee Community Organizations
Tennessee Farm Bureau
Tennessee Farm Winegrowers Alliance
Tennessee Forestry Association
Tennessee Fuel & Convenience Store Association
Tennessee Grocers and Convenience Store Association
Tennessee Home Builders Association
Tennessee Hospitality Association
Tennessee Retail Association
“Simplifying the forgiveness application process for the smallest borrowers will provide additional relief to struggling small businesses by eliminating unnecessarily complicated paperwork or expending precious dollars on consultants in order to comply with the regulations,” Barrett said.
