Dear Chairman Rubio, Chairwoman Velázquez, and Ranking Members Cardin and Chabot:
The undersigned trade associations representing thousands of small businesses, banks, credit unions, financial institutions, and employees strongly support S. 4117, "The Paycheck Protection Program Small Business Forgiveness Act", sponsored by Senators Kevin Cramer, Bob Menendez, Thom Tillis and Kyrsten Sinema. The Paycheck Protection Program (PPP), established by Congress in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, has provided millions of small businesses the economic relief they need to meet the challenges posed by the COVID-19 crisis. This bipartisan legislation would ensure our nation's small business owners can focus their time, energy, and resources back into their business and communities instead of allocating significant time and resources into completing complex forgiveness forms.
In order to help our nation's smallest businesses, we urge Congress to quickly pass this legislation that would forgive PPP loans of less than $150,000 upon the borrower's completion of a simple, one-page forgiveness document. PPP loans of $150,000 and under account for 86 percent of total PPP recipients, but less than 27 percent of PPP loan dollars. Expediting the loan forgiveness process for many of these hard-hit businesses will save more than $7 billion dollars and hours of paperwork.
Data provided in an independent analysis by AQN Strategies (AQN) has shown an estimated benefit of issuing auto-forgiveness for various loan size thresholds. AQN anticipates the combined resource requirements of operators' time and/or third-party expenses to represent an effective cost of $2,000- $4,000 for each business that applies for forgiveness, requiring 20- 100 hours of focused time from key leaders of these businesses.
With an average loan size of less than $19,000 for the smallest 60 percent of loans, this estimate would represent 10- 20 percent of the loan amount itself, which is otherwise intended to support payroll, rent, and other obligations necessary to keep businesses alive and ready to restart.
In addition, AQN's analysis suggests that the cost to businesses and lenders would be lower than the cost for the government to autoforgive loans.
Small businesses and their employees are the backbone of our nation's economy and communities. Their time and resources would be better focused on getting the economy safely back up and running, not processing burdensome paperwork.
We strongly support S. 4117 and look forward to working with you, the Committee, and the 116th Congress to pass this bill and have it signed into law.
Thank you for your strong, common sense leadership on such a critical issue.
Sincerely,
The Tire Industry Association and other trade associations.
Dear Speaker Pelosi, Majority Leader McConnell, Minority Leader McCarthy, and Minority Leader Schumer:
TIA is part of America's Recovery Fund Coalition. Through the coalition, we represent more than 150 organizations - from local chambers to trade associations - which have come together in the interest of promoting a sustainable economic recovery for America.
We fear that without thoughtful, additional capital support, the 45 percent of the national workforce we represent and the communities where we live and work will experience avoidable economic damage instead of the robust recovery we have worked so hard for - and our nation's economic challenges will be unnecessarily prolonged.
For the American economy to recover, Congress must do more. It must provide access to additional funds for businesses to keep workers on payroll, to keep paying rent and other operating obligations, and to keep moving forward even as re-openings are paused in the name of public health. Additionally, access to this capital lifeline should be focused broadly on the most impacted businesses with as little administration and future financial liability as possible. Without further federal action and assistance, temporary layoffs will become permanent, consumer spending may never recover to pre-pandemic levels, business revenues will fail to achieve the necessary levels to continue, and the deflationary cycle will repeat itself long into the future.
There is no doubt the initial action taken by Congress helped address the economic bludgeoning COVID-19 foisted upon the economy. With continued uncertainty surrounding the ongoing public health response to this pandemic, there should be similar little doubt that, without supportive additional steps for businesses, the initial benefits of these actions will be undermined. If we abandon them now, American companies will continue to sag beneath the weight of the pandemic as states repeatedly must pause their reopening in response to subsequent surges in COVID-19 cases.
Over 100,000 small businesses have already closed shop forever, and an additional 2 million are at risk of imminently closing. Business is slowing down after a momentary uptick and the GDP is projected to fall significantly. The American economy is in a hole that will take years to dig out of, even if the rapid job replacement we saw in June repeats itself.
Therefore, we ask you to take the necessary steps to improve support for Americans as they work so hard to get through this time. It is only through such support that a sustainable recovery is possible.
Sincerely,
The Tire Industry Association and other trade associations.