Hassle-Free PPP Forgiveness, Second Shot of PPP for Struggling Businesses in Play

Advocacy News
July 29, 2020
By Mark Valentini, Director of Legislative Affairs

Congress is in the midst of negotiating the next comprehensive COVID-19 economic relief package. Trump administration officials have been lobbying Congress on several key administration priorities, the top two being a payroll tax cut and automatic forgiveness of Paycheck Protection Program (PPP) loans under $150,000.

The payroll tax cut has no support from Republicans or Democrats in either the Senate or House; therefore it is unlikely to be included in a final bill. However, the idea of automatic forgiveness of some PPP loans floated by Treasury Secretary Steven Mnuchin seems to be gaining some bipartisan steam. 

To be clear, this applies to loans that were $150,000 or less when the application was initiated; those who took loans greater than $150,000 would still need to demonstrate that the loan was used for qualified expenses.

The proposal would provide further relief to small businesses by essentially forgiving a loan of $150,000 or less with no or minimal paperwork that would otherwise be necessary when applying for PPP loan forgiveness. It would also provide some peace of mind for small businesses worried about whether the Small Business Administration (SBA) will forgive the entire amount, or whether small businesses have all the paperwork necessary to qualify for full forgiveness.

On the other hand, a program that was already the subject of fraud may be susceptible to even further fraud since the Treasury Secretary is essentially offering to forgive loans up to $150,000 with little or no questions asked. This problem would be compounded should the PPP be extended through the end of the year. It also brings up questions of fairness for those businesses that took a loan in the program’s infancy, exhausted their money and meticulously saved receipts and paystubs in order to get ready to file for forgiveness, not to mention fairness for those businesses that took loans greater than $150,000. 

Another proposal would allow businesses that have already received a PPP loan to apply for another PPP loan if they can demonstrate that business is down at least 50% from pre-COVID levels.

As of press time, the language has not been drafted for any of these proposals, but this debate is active and ongoing. PHCC’s Legislative Affairs department is privy to the conversation and will keep our members updated on any developments.

Director of Legislative Affairs
, PHCC-National Association
Mark Valentini is the Director of Legislative Affairs for PHCC—National Association. A seasoned professional with more than 20 years of experience on Capitol Hill and with several national trade associations, Valentini applies his expertise in public policy, workforce and training, and insurance and tax matters to advocate on behalf of all PHCC members.

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