The Treasury Department said this week that it would soon begin forgiving loans granted to small-business owners under the Paycheck Protection Program, following banks’ and borrowers’ complaints that the process had been bogged down, and that no loans have yet been forgiven.
The agency expects to approve and pay forgiveness requests that have already been received by late this week or early next, a Treasury spokesperson told the Wall Street Journal. As indicated, loans above $2 million will receive added scrutiny.
A growing number of banks and small business owners, including many within the long-term care sector, have been waiting to file for loan forgiveness under the $760 billion program, in the hopes that the government would issue simplified guidance. Lawmakers in both the House and Senate have introduced legislation to streamline forgiveness for PPP loans of less than $150,000, granting blanket forgiveness to borrowers with a simple attestation that the funds were used in accordance with guidelines, the Wall Street Journal reported.
“The ultimate success of the program will depend on forgiveness, so small-business owners are eager to learn of [Treasury officials’] decisions,” Kevin Kuhlman, senior director of government relations for the National Federation of Independent Business, told the news outlet.
Loan forgiveness could make or break many operators amid the ongoing pandemic. Half of assisted living providers are operating at a loss, and 64% say they won’t be able to sustain operations for another year, according to survey results released in August by the National Center for Assisted Living. A similar survey conducted among skilled care facilities by the American Health Care Association showed they are faring even worse, with 55% of the respondents currently operating at a loss, and 72% saying they won’t be able to sustain operations another year at the current pace.