Washington, D.C.— Today, the House Small Business Committee, led by Chairwoman Nydia M. Velázquez (D-NY), held a hearing examining the current state of the Paycheck Protection Program (PPP) and the future of the program, which is currently set to expire on March 31st. The hearing also gave small business owners and lenders the opportunity to testify on the impact of a recent set of PPP program reforms that the Biden administration instituted.
“Across the country, case counts, hospitalizations, and deaths are trending in the right direction. At the same time, we are vaccinating millions of Americans daily. This is cause for optimism, but it does not mean this crisis is over,” said Chairwoman Velázquez. “The pandemic has caused unprecedented harm for small businesses, and it would be a mistake to withdraw support abruptly. Congress must work to understand the current realities facing small business owners and extend PPP to meet their needs.”
In 2021, small businesses have obtained 2.1 million PPP loans totaling $156.2 billion. With demand still strong and the pandemic lingering, the Committee examined ways to extend the program beyond its current expiration date in a way that meets the needs of business owners moving forward. During the hearing, lenders and business owners discussed the ways Congress can ensure that small firms don’t abruptly lose critical support during the ongoing pandemic.
During the hearing, members also discussed the impact of President Biden’s recent reforms to PPP. On February 22nd, the administration announced the implementation of a 14-day exclusivity window for small businesses with fewer than 20 employees. The reforms also took steps to provide more aid to sole proprietors, made formerly incarcerated individuals and those with federal student loan delinquencies eligible for PPP, and clarified the use of Individual Taxpayer Identification Numbers for loan applications. According to data from the Small Business Administration, these changes have resulted in upticks in the percentage of loans going to underserved businesses.
“There were countless error messages and holds that really brought frustration to our team and our small businesses to whom we could not give answers,” said Hilda Kennedy, Founder and President of AmPac Tri-State CDC in Ontario, CA. “At the time, there was no solution for a fix and the communication from SBA was non-existent. With the changes made to PPP on February 24th, the SBA and its team addressed many of the error and hold messages. It was as if a magic wand was waved over the portal, and all of a sudden several of our submitted PPP loans were being approved.”
“As a small business owner, I call upon our Members of Congress to expand PPP loans for our nation's small and minority-owned businesses, and to provide more support and financial resources to the SBA and the Minority Business Development Agency to fund critical technical assistance, in multiple languages, through public private partnerships with Chambers of Commerce and other business associations across the country,” said Lisa Bombín, President and CEO Unico Communications, Inc. in San Antonio, TX. Our road to recovery is still vast and organizations like these need to be funded and sustained to continue helping businesses like mine navigate the ongoing economic crisis.”
“There are significant operational problems within the PPP process that are resulting in urgent challenges and significant complexity for many small business borrowers who are trying to enter into the SBA system, and delays in processing once in the system,” said Lisa Simpson, CPA, CGMA, Vice President of Firm Services American Institute of CPAs. “An extension of the PPP application deadline for at least 60 days after March 31, 2021 will provide an opportunity for the SBA to address its technical issues, provide critical guidance, and work with lenders and borrowers so that small businesses can navigate the application process and receive a loan.”
“On this Committee, we will continue to work to make the program more equitable and accessible for the smallest of small businesses,” said Chairwoman Velázquez. “The public health situation surrounding the virus is improving, but we cannot let up. Small businesses still need our help, and we must work to ensure this program is serving their interests. That means continuing to evaluate the coverage of PPP and making necessary tweaks to maximize the program’s reach and impact.”