American Financial Services Association

SBA Should Modify PPP Loan Review

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SBA Should Modify PPP Loan Review

AFSA joined a coalition of 80 trade associations asking policymakers to revise a proposed Paycheck Protection Program (PPP) review process. The members of the organizations have been on the frontlines both delivering and receiving aid from PPP loans which have been critical to the small business economy over the last eight months. The associations sent a letter to Congressional leadership and to the administration regarding this review process, which consists of forms that lenders will be required to send to PPP borrowers who got loans of over $2 million.

The Small Business Administration (SBA) has drafted, but not actually released publicly, two new forms to be sent to borrowers under the Paycheck Protection Program (PPP) in preparation for audits by the agency. The forms are extensive, require significant amounts of information and documentations, as well as being rear-facing. The associations wrote, “Unfortunately, the questionnaires introduce a confusing and burdensome process for both borrowers and lenders, and we fear that it could lead the agencies to inappropriately question thousands of qualified PPP loans made to struggling small businesses. On behalf of the millions of American workers supported by PPP loans, we urge you to act quickly to work directly with SBA and Treasury to avoid this unintended consequence.”

The associations added, “We strongly encourage you to ensure that all agency review processes are necessary and appropriate to avoid undue burden on borrowers and lenders, possible bias and subjectivity, or concerning departures from requirements borrowers and lenders understood from the statute and original implementing guidance. We do not believe that the information collection sought by the new Loan Necessity Questionnaires achieves this appropriate balance.”

November 18th, 2020 by