Raskin Urges SBA, Treasury to Clarify Small Businesses Can Reapply for PPP Loans
WASHINGTON, D.C. — Congressman Jamie Raskin (MD-08) led 33 House Members in urging Small Business Administration (SBA) Administrator Jovita Carranza and Treasury Secretary Steven Mnuchin to immediately issue guidance clarifying that small business owners who returned their Paycheck Protection Program (PPP) loans are able to reapply for the program given that the terms have been substantially improved by the recently adopted Paycheck Protection Program (PPP) Flexibility Act. Numerous constituents have expressed concern that their lenders were unable to process their second loan application or were uncertain about whether they should because the first loan had been returned.
Prior to the enactment of the PPP Flexibility Act, the restrictive 8-week timeline for PPP borrowers set forth in the CARES Act became a major frustration for—and impediment to participation by—small businesses across America. Many other businesses voiced displeasure with the rigid requirement that at least 75% of a borrower’s loans be used towards payroll costs in order to qualify for loan forgiveness. According to lenders, thousands of companies that were approved for PPP loans returned the money, with many companies citing confusing and restrictive loan forgiveness terms.
The Members wrote: “In light of these welcome changes to PPP, many small businesses that previously returned their disbursed loans are now eager to benefit from the improved program. Yet contrary to a statement from an SBA spokesperson that companies which have returned PPP loans would be able to reapply, many small businesses have been flatly rejected for a loan after resubmitting their materials. Lenders and SBA employees appear to be erring on the side of caution and informing small business owners that each company may only have one loan, even if the loan was promptly repaid in full. However, the statement from the SBA spokesperson suggests that companies may reapply, so long as the previous E-Tran number is made inactive and the initial loan is cancelled. Given this confusion among SBA employees, lenders and small businesses, we urge you to immediately issue guidance clarifying that small businesses which have returned disbursed PPP loans may reapply and participate in the program. This will certainly be consistent with legislative intent as Congress made these changes to help our small business constituents participate in the program.”
In addition to Rep. Raskin, the letter was also signed by the following House Members: Brian Fitzpatrick, David N. Cicilline, Eleanor Holmes Norton, Sheila Jackson Lee, Mark Takano, Jimmy Panetta, Angie Craig, Raúl M. Grijalva, Joseph D. Morelle, Jesús G. “Chuy" García, Brenda L. Lawrence, Dina Titus, Thomas R. Suozzi, Donald S. Beyer Jr., Val B. Demings, David Trone, Cindy Axne, Adriano Espaillat, John B. Larson, Abigail D. Spanberger, Peter Welch, Ted Lieu, James P. McGovern, Mike Doyle, Dave Loebsack, Jan Schakowsky, Diana DeGette, Joe Neguse, Anthony G. Brown, Mikie Sherrill, Katie Porter, and Marc Veasey.
A copy of the letter is available here.