Statement of the Hon. Nydia M. Velazquez on What Comes Next? PPP Forgiveness
Washington, September 1, 2021
Seventeen months ago, during the early days of the COVID crisis, this committee and our counterparts in the Senate worked together to create emergency relief programs to assist small businesses. At that time, hundreds of thousands of small firms across the country were closing their doors to protect their customers and their employees.
Recognizing the dire nature of this situation, Congress created the Paycheck Protection Program. The PPP was an unprecedented government effort that sought to distribute hundreds of billions of dollars to entrepreneurs so they could keep their lights on and pay their employees. Over the course of the past year, Congress replenished the funds multiple times and made critical improvements to make the program more equitable for the smallest of small businesses and the underserved.
More than $800 billion dollars in critical PPP support was provided to small businesses during their time of need. PPP was never perfect, but thanks to the hard work of SBA employees and necessary reforms made by Congress, the program has helped save millions of businesses from permanent closure.
With conditions improving from the lows of the pandemic, it’s vital that this committee turn to what may be the most important part of the program, the federal government’s promise that these loans can be forgiven and converted into grants. PPP guidelines stipulated that SBA forgive loans if small businesses spend funds on meeting payroll costs and other related expenses.
SBA has already received 5.6 million loan forgiveness requests and made over 5.2 million forgiveness payments. This means that approximately 46 percent of all PPP loans have received payments. These statistics represent progress, but they also show that there is a long way to go. Unexpected debt can hinder a small employer’s recovery and cloud its path to future growth. So, we must examine the obstacles preventing recipients from loan forgiveness and work to alleviate them.
I look forward to discussing how SBA is working to make PPP forgiveness as simple as possible and examining solutions to maximize total loan forgiveness, especially for small-dollar borrowers.