06/04/2020 11:11:07 PM
The Consumer Banking Association and the Banking Policy Institute recently sent a letter to the Small Business Committees in both chambers of Congress. Their goal was to encourage legislation that will essentially auto-forgive PPP loans below $150,000. The motivation seems to be that these smaller loans will cost the banks more to service than they will earn at a 1% interest rate.
Whatever their motivation, it would be great for many of you as well. Remember, the intention of the PPP program was to help keep people on payroll. It will now be fairly easy to spend all the PPP proceeds on payroll and, thereby, fulfill its purpose. Forgiving these smaller loans automatically will reduce documentation headaches for both your practice and the banks. Win-win! (“Why will it be easy now to spend all the PPP proceeds on payroll?” you ask. Because the period has been extended from 8 to 24 weeks. Yes, it’s true-details coming in the next post!)
This letter appears to be the only action so far. No bill is drafted or referred to a committee in Congress, meaning there’s nothing official in the works yet. We’ll be watching for you!