The federal government should weigh forgiving all “small” loans provided under the Paycheck Protection Program during the coronavirus pandemic, U.S. Treasury Secretary Steven Mnuchin said.
“We should consider forgiving all small loans, but would need fraud protection,” Mnuchin told the House Small Business Subcommittee on Friday.
The government has approved more than 4.9 million PPP loans totaling $518.1 billion, as of Thursday night. Mnuchin didn’t specify what he considers a “small” loan that could be forgiven.
A coalition of almost 150 groups sent a letter July 9 to legislative leaders calling for all PPP loans of less than $150,000 to automatically become grants, instead of requiring those owners to complete the complicated loan-forgiveness process _ saying it will save more than $7 billion and hours of paperwork.
The PPP allows loans of as much as $10 million that can become grants if borrowers spend most of the proceeds on payroll costs. Recipients apply to have loans forgiven, and must show they maintained headcount and salaries, or the amount forgiven is reduced.
Small-business advocates have complained that the application is too long and the process too complicated, especially for the smallest businesses.