US Treasury Secretary Steven Mnuchin testifies with US Small Business Administration Trustee Jovita Carranza during Senate Small Business and Entrepreneurship hearings to review Title I implementation of the CARES Act on Capitol Hill on 10 June 2020 in Washington, DC.
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Senate Democrats want Treasury Secretary Steven Mnuchin and Small Business Administration Chief Jovita Carranza to streamline the process for requesting loan forgiveness under the Paycheck Protection Program.
Senators called for a number of changes, including the creation of an easy-to-use form for small loans, a well-staffed hotline to provide assistance to program applicants, and a “suite” of online tools designed. to help applicants. Senators also want the Treasury Department to issue safe harbor protection guidelines for lenders to borrowers applying for smaller loans.
“As the program enters its next phase and borrowers begin to request forgiveness for their loans, there is an immediate need to dramatically improve the forgiveness application process, which is extremely cumbersome and overly complex, especially for creditors. very small businesses, sole proprietors and underserved borrowers, ”wrote Senate Minority Leader Chuck Schumer, DN.Y., and Sen. Ben Cardin, D-Md., to Mnuchin and Carranza. The letter was signed by the 47 Senate Democrats and Independents who caucus with the Democrats. It was delivered on Friday.
Senators expressed concern that the current form, which is 11 pages long, “is particularly cumbersome, lengthy and costly for very small and underserved businesses, including micro, sole proprietorship, small rural businesses. and small businesses owned by minorities “. They feared that these companies “feel compelled to hire accountants and lawyers to fill out the forgiveness form so as to ensure that the loans will be forgiven.”
The program was initially rolled out in April, offering $ 349 billion to small businesses forced to shut down or scale back operations as the coronavirus spreads. After these funds quickly depleted, the government replenished the program with an additional $ 310 billion. He offered forgivable loans to businesses on the condition that a business maintained compensation for its employees.
The loan was initially offered for eight weeks, but was later extended to 24 weeks, along with other changes to the program that relax its guidelines.
Since the start of the coronavirus pandemic, more than 44 million workers have filed for unemployment.
At the start of June, more than $ 120 billion of the additional $ 310 billion allocated to the program had not yet been used, raising fears that its design was insufficient for the companies for which it is intended. The program has also gone through several rounds of advice, which has led some critics to deem it too confusing or intimidating for potential applicants.
Senators also urged the Treasury to include a section in an updated and streamlined loan cancellation form to collect data, including demographic information, to ensure minority homeowners have sufficient access to funds.