Government

Treasury to forgive PPP loans in response to borrower complaints

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September 30, 2020

The U.S. Treasury Department will begin forgiving loans to small business owners under the Paycheck Protection Program in response to complaints from borrowers and banks that the process has been too slow, according to a Wall Street Journal report.

Beginning later this week or early next week, the government plans to pay forgiveness requests, according to a Treasury spokesperson. Loans of more than $2 million will be scrutinized more closely.

Banks, business owners and lawmakers have said the process has been too slow under the program, which allocated $670 billion to help small businesses during the pandemic. The process provided forgivable government loans distributed to businesses through banks.

The Small Business Administration received more than 96,000 applications from companies seeking loan forgiveness, none of which have been forgiven, according to William Manger, the agency's associate administrator and chief of staff, in comments to House lawmakers.

Nearly $130 billion of the PPP funding remains unallocated since the program's expiration in August. Lawmakers have not decided how to use the remaining funds to help small businesses.

Legislation has also been introduced to forgive PPP loans of less than $150,000 based on borrower assurance to use the loans according to guidelines.

Treasury Secretary Steven Mnuchin has encouraged business owners to request forgiveness quickly rather than wait for legislation.