June 19, 2020—The U.S. House of Representatives Committee on Small Business recently held a hearing to go over challenges borrowers and lenders face, according to a press release from the Automotive Service Association.
According to the release, the hearing titled, “Paycheck Protection Program: Loan Forgiveness and Other Challenges,” went over Paycheck Protection Program (PPP), the challenges of applying for and using the loans, and additional suggestions for optimizing the program.
The initial PPP provided billions of dollars for small businesses to remain open during the initial phase of business closures due to the COVID-19 pandemic. However, restrictions in the law and a confusing roll out of the program caused hesitation among borrowers.
In response to these obstacles with the program, the PPP Flexibility Act was passed addressing issues such as the 75/25 rule and extending the coverage period during which a loan recipient may use the funds for certain expenses while remaining eligible for forgiveness from eight weeks to 24 weeks, as well as others.
Committees in the U.S. House and Senate have continued to hold hearings on the roll out and implementation of the program as these loans have been critical to the economic recovery of small businesses nationwide.
Prior to the hearing, House Small Business Chairwoman Nydia Velazquez sent a letter to Carranza and Mnuchin, calling on the administration to begin publishing demographic data on the PPP and Economic Injury Disaster Loan (EIDL) programs.