AFSA Urges PPP Loan Forgiveness for Finance Companies
This week, AFSA submitted a letter for the record to the House Small Business Committee requesting that Congress instruct the Small Business Administration (SBA) to clarify that finance companies are eligible for Paycheck Protection Program (PPP) loan forgiveness, as directed by Congress in the CARES Act.
The letter was sent in advance of the Committee’s hearing featuring testimony from SBA Administrator Isabella Casillas Guzman on her vision for the agency and a discussion regarding opportunities and challenges facing small businesses as the country emerges from the COVID-19 pandemic.
The hearing touched on several COVID-relief programs, including COVID-19 Economic Injury Disaster Loans (EIDL) and the PPP. House members requested – given all the uncertainties facing businesses and their constituents in their districts – that during the pandemic, the Administrator be responsive to congressional correspondence with the agency. Previously, AFSA applauded Rep. Roger Williams’ letter to the SBA requesting clarification that finance companies are eligible for PPP loan forgiveness.
AFSA’s members, like so many businesses across the country, faced sudden and dramatic revenue shortfalls with the onset of the pandemic. These businesses applied for and received PPP loans to cover payroll costs to prevent furloughing staff. At the time, the businesses took out loans with the understanding that they would be eligible for loan forgiveness given that they followed PPP guidelines.
Now, many of these businesses are seeing their PPP loan forgiveness applications being denied despite the CARES Act mandating that they are eligible for forgiveness. This is largely due to the agency’s April 2020 adoption of a narrower interpretation of eligible businesses, resulting in many installment lenders and vehicle finance companies facing greater scrutiny from SBA lenders regarding their eligibility.
AFSA strongly urges the SBA to make clear that finance companies who complied with CARES Act requirements be granted PPP loan forgiveness.
November 18th, 2021
