Transcripts For CSPAN2 House Hearing On PPP Loan Forgiveness Process 20240712

Hearings on the ppp, and weve heard from borrowers and lenders about the challenges theyve faced in accessing the program. Ive also traveled across my district of burlington and ocean counties in new jersey to speak with Business Owners about how theyve fared during the pandemic, and ive heard some of the successes and challenges theyve faced with ppp and uncertainty about what the future holds. From borrowers who eventually did access a loan, the Committee Heard concerns about complicated, unclear, and sometimes conflicting Program Rules and other requirements associated with loan forgiveness. Lenders also expressed a great deal of frustration over the needlessly complicated rules and reported feeling unable to adequately help their borrowers through the forgiveness process. Through it all, borrowers simply wanted to ensure they were using loan proceeds consistent with the law so they could qualify for full loan forgiveness, and effectively convert the loan into a grant, which was the congressional intent in the cares act. Loan forgiveness is a centerpiece of the Paycheck Protection Program, especially since the expectation by many borrowers and lenders was that the loans would be fully forgiven. Less than full forgiveness for a large body of loans could have serious unintended negative consequences for borrowers and lenders who have developed Business Plans around full loan forgiveness. As early as june, sba and treasury recognized how challenging the initial loan forgiveness application was and released an ez Application Form. Unfortunately, borrowers and lenders alike have reported no material differences between the forms and calls for a streamlined Application Form for smalldollar ppp borrowers have increased. In the meantime, lenders have remained limited in their ability to provide guidance to their borrowers, leading to great anxiety and helplessness among borrowers, who just want to do things the right way, and need clear and simple rules from sba and treasury in order to do so. And finally, we have some data to corroborate what the Lending Community has been reporting anecdotally. This week, the Government Accountability office, or gao, published a new report showing that as of september 8, sba had only received about 56,000 forgiveness decisions from lenders, representing just over 1 of the over 5. 2 million ppp loans outstanding. This figure substantiates what the Lending Community has been reporting anecdotally. First, borrowers are struggling to simply understand the terms and data needed to accurately complete the forms. And second, lenders are limited in their ability to provide Technical Assistance to borrowers completing the forms because of the insufficient guidance. So as we enter the forgiveness period, it is timely to conduct this hearing dedicated specifically to loan forgiveness, so that our subcommittee can assess the issues faced by borrowers and lenders and weigh proposals to provide relief for borrowers who need it. I look forward to our discussion today and thank each of you again for taking the time to testify before us today. I now youll to the Ranking Member for his Opening Statement yield. Thank you, mr. Chairman, and thank you for this very important timely hearing. Small businesses across this nation from my state of oklahoma to the chairman stitching in new jersey have been disproportionate devastated by covid19. When it reached our Country Congress acted fast come numerous programs were created and the men to provide assistance to the American Public and our economy. One of these programs was a Paycheck Protection Program here in a matter of days the sba and the Department Treasury outlined rules and regulations so the latest could start assisting Small Businesses. The federal government moved quickly and i would like to them for that. One of the top sba officials in charge of ppp testified yesterday presented Important Information to our committee. Todays conversation will build on that hearing and focus on the critical aspects of epp loan forgiveness. As a Small Business owner for 35 years and the founder of the local community make i can see a difficult this process can be for borrowers and lenders alike. My goal and id like to think it is same for all of my fellow Committee Members is to make this process, forgiveness process as simple and as efficient as possible. We ask the lender to carry a heavy burden and are Small Businesses are being crushed under circumstances out of their control. We owe it to them to discuss further ways to string line the process. Unfortunately intent to hinder come continue hinder how congress can provide assistance while improving the program. Just this week we try to fill to get a vote on h. R. 8265 that would improve and extend the popular program. More work needs to be done and that is why this theory is paramount. It is unconscionable we continue to ignore our nations smallest firms that desperately need this assistance. Small businesses and lenders need full rules of the road in order to make everyday business decisions. Changing guidance present challenges when it sees Seek Solutions to so this process can be improved. I look for to exploring the topics to today with our witne. I know there are some concerns that a witness but for the above specific member of the house and the way their office conducts business. Even though this member is not here to defend himself. This is not how we conduct business. We strive to work in a bipartisan manner so its important we do. We did not attack one another for political gain and im extremely disappointed my colleagues would allow this testimony to be on the record. Truthfully many of the problems are what does is bring up that he could easily be solved if the majority would allow Ranking Member stabenow bill h. R. 8265 to come for a vote. As most of them if not all would support it. All of them have the opportunity to allow this bill to come for vote by signing the discharge petition for 8265 which was filed by Jaime Herrera butler earlier this morning. I urge my colleagues to take action to help Small Businesses in each of the distance across the country i signed the discharge petition on the, since legislation which they all support behind the scenes. I would also like to say this is the second that ive been disappointed by the majority selection of a witness and help this is not a signal of the committee is becoming. Thank you, mr. Chairman. I yield back. Thank you, mr. Hern. Appreciate your comment would like to take a moment to explain how this hearing will proceed to each witness will have five minutes to provide a statement and each Committee Member will have five minutes for questions. Please ensure that your microphone is on when you begin speaking and that you return to mute when finished. With that i would like to introduce our witnesses before we begin. Our first witness today is ms. Lynn ozer, president of the sba Lending Department at fulton bank, a 20 billion Regional Bank headquartered in lancaster, pennsylvania. She manages all of the sba lending which covers my home state of new jersey, pennsylvania, maryland, delaware, virginia, washington, d. C. , and 249 office locations. She graduated magna cum laude from Temple University where she earned a bba degree, majoring in accounting. She served as the first female chairwoman of the board of directors of the National Association of government guaranteed lenders and she is presently cochair of the Technical Committee while serving as an instructor for the association. Welcome, mr. Gosar. Our second witness is ms. Amy bonfig, the owner of little saints academy, a Childcare Center in central minnesota. When so few ppp bar was had applied for the forgiveness, his bond the had not only completed the loan Application Form letters also start an Informal Network of fellow Childcare Center in minnesota to help them work through the forgiveness application process. Ms. Bonfig, we look for to hearing your feedback on the application process, as a borrower and welcome you here today. Our third witness is mr. Jim parker, a Small Business owner from my district, founder and owner of riverview studios and a 42 year veteran for labor. He has program for Public Television during history has produced hundreds of multilingual documentary programs for corporate and nonprofit clients. He is also face serious obstacles with the ppp forgiveness process, and we look for to hearing his perspective on the issues as well. Thank you for joining us today from the new jersey third congressional district, mr. Parker. I would now like to yield to the Ranking Member to introduce our final witness. Thank you, mr. Chairman. Our next witnesses pete patel, the ceo and president of promise hotels, Company Founder with his wife 12 years ago. Promise hotels is a Hospitality Business of group that runs a dozen hotels in the tulsa, oklahoma, area. My district. With five years of experience he is a current board member of your club hotel and lodging association and the tulsa hotel and lodging association. Hes also a former board member of the Tulsa Metro Chamber of commerce. Mr. Patel we are grateful you can take the time away from running their businesses to talk with us this morning. We know that you any other witnesses are very busy so we appreciate all of your time. Welcome and we look forward it to your testimony. Thank you, mr. Hern. We will start with the witnesses here, so ms. Ozer, you are no recognize for five minutes for your Opening Statement. Thank you for inviting me, and good morning, everyone. My bank made nearly 2 billion of ppp loans serving 11,000 Small Businesses that were desperate, and lenders nationwide stepped up to implement this congressionally provided lifeline. We should applaud the countless Success Stories of businesses saved and employees retained. But it hasnt been easy. They were front in issues especially with eligibility and lenders role, and simple no cost fixes are needed in any future program extension. We must learn from what didnt work. When it comes to forgiveness, significant concerns need to be addressed now. Piecemeal guidance continue to create confusion. There still no guidance for major issues, and without answers i i cannot help my borrowers. We have no idea how i guarantee will be honored when a a busins that permanently closed or file bankruptcy. If loads have remaining balance after forgiveness we have no idea how we are expected to service those loans long term. For bar was requesting permission to sell to new owners we have no idea how to help them. More portly, borrowers are confused by the burdensome forgiveness process, and panicked at the loans they believed would be grants if they follow the rules may become burdensome debt because they cant muddle through the paperwork. Borrowers remain confused about the covered. Mac and how to document, i will expect account with local governments shifting requirements. They are concerned about date harvick calculations of qualify for full forgiveness. One of our borrowers summarizer angst, i quote, i have tried and read many instructions regarding the forgiveness application by still find it very confusing. Ive even listen to multiple webinars. I would love someone to be able to translate that for me come in court. This bar is not alone. Virtually all borrowers share this concern and so do lenders. Borrowers and lenders see reports that congress will streamline forgiveness. Borrowers have delayed submitting applications hoping for that change. I urge quick authorization of a simplified forgiveness for smaller loads. This must be prescriptive or we wind up with another easy form which really is a making anything easier. Simplification would provide an enormous relief. Congress must also prescript of the clarify the lenders role in the forgiveness process. Identified by gao is a major problem. From the outset lenders believe we would to living assistant because we have a network and capacity the federal government did not happen. Other than providing the capital quickly, our role was to be limited. Only after we make millions of loans to banks learn we would have to verify the accuracy of the borrowers application and the forgiveness could hinge on them. Weve gone from being a conduit to being deeply involved in an illdefined process. At the heart of this issue is that the lender role as defined by the agencies create an inherent conflict of interest. Lenders lend to be we be the arbiter of you receive forgiveness from the government, especially when our decision determine whether our own funds will be reimbursed. To this and i urge you to clarify the lenders role in the forgiveness process as part of any streamlined application for forgiveness. I encourage you to include a strength to better defined lender responsibilities and verify borrower provided documents and certification. Lenders are on the front lines, and delivering this crucial aid fms fully understand our role to become triple helping our borrowers. Until the many issues are addressed many lenders will be reluctant to embrace or expand a new program. Most will agree we need to fully understand how to forgiveness process will work. How fda will honor its guarantees and with the guidance still to come will say if we can even consider participating in new programs or extensions. Otherwise we would not be able to get bar was the help they are seeking and deserve. Finally, a reminder of the best tool to assist americas Small Business longterm in good times and in bad has always been the regular seven a loan company the same temporary 7a in half the provision like waivers and guarantee percentages, lifted that we may, that it worked previously so well in tough times, we experienced before. They will work again. This means extending the section 711 12 debt relief payments with our hugely stabilizing and have been for the existing sba portfolios and also encourage new lending. One thing remains for these payments and i cannot think of a better tool to provide meaningful assistance to Small Business. Thank you so much and i look forward to your questions. Thank you so much for your statement. Appreciate it will turn it over to ms. Bonfig now, so youre recognize five minutes. Over to you. Good morning and thank you for giving the time to share my expense with the ppp forgiveness application process. I am the owner of little saints academy, a licensed Child Care Center in st. Joseph, minnesota. Im honored to have been chosen to speak to your committee today a map of myself, my lender, our local Small Business to Government Center and fellow Childcare Centers in minnesota. I also been working with the director of the minnesota Central Region to gather and share information as it becomes available. Our local office has been a vital resource for little saints over the last ten years and continues to have getting through this hardship with us. During the start of the pandemic Childcare Centers were asked to remain open and care for essential workers children. With no guidance are collaborative of childcare professionals join together seeking information create a safe space and make decisions as a group for the children we care for, our staff and our businesses. With little to no financial aid, sadly the Paycheck Protection Program became available and i was incredibly grateful to receive a forgivable loan. Through this process i have kept myself under group aware of changes. I create a spreadsheet for the group because it was a very lengthy forgiveness application process. I met with them via zoom to help make sense of it when i could barely make sense of it myself. Barely. I spent much of my time over the days and several months focus on the success of our pp loans and the forgiveness. Was incredibly timeconsuming and at the end of our covered period after funds were nearly exhausted, the forgiveness application finally appeared but with the new [inaudible] which was completely mindboggling because we had to be counted as fulltime equivalent on our loan application and that we couldnt count ourselves and fulltime safe harbor. Because of that i was unable to spin my entire loan in eight weeks. Extending two weeks of the payroll i could benefit from the entire loan but we did to findt about the 24 week extension option until we were in our eighth week and had exhausted most of our funds. After mike my cowbird. Id no choice but to lay let lf staff within certain of covid19 and the ability to stay open or even beat the equivalent safe harbor criteria, i was too afraid to choose the 24 week option. The rules have changed again by the sba is that getting my lenders need information to submit my application. I do understand the concept and intention of program but without forgiveness the reality i couldnt have in unforgiven loan that was used to pay my staff the benefits they really shouldve been able to collect to the minnesota unemployment program. Please understand we need your support. We need peace of mind knowing our loans have been forgiven as we look to the future Financial Stability of our programs we run our daily basis is on tight budgets with our fingers crossed that will make it another day. We do this in the old norm of the new normal. For centers that dont qualify for the sba new Program Including the cost of feeding the children would help tremendously. I would like for you to consider making this a simpler process. The ez form still needs many of the cartilage is a long form to fill out the application honestly and accurately. Six unrelated to pull reports and other required information from them is way too complicated. Please consider some degree of automatic forgiveness or at least a forgiveness process with fewer criteria. On behalf of my fellow childcare providers, i thank you for all i need to speak to you on behalf of our situation and moving forward with decisions about the ppp loan forgiveness. Thank you, ms. Bonfig. Thank you for sharing your experiences there. Want to come over to mr. Parker. You are now recognized for five minutes. Chairman kim, Ranking Member hern, and members of the committee, thank you for the opportunity to speak to you about our expenses with the Paycheck Protection Program and the programs loan forgiveness process. My name is jim parker. I am riverview studios, a Video Production company in bordentown, new jersey. Im a member of the executive committee of the main Street Alliance of new jersey, a network of Small Businesses in the garden state and the chapter of the National Main Street Alliance. Earlier this year i apply for ppp finds and received 11,200 through the program. Having used the ppp funds by early summer i am no waiting to begin the process of closing out the loan. In my case im hopeful 100 of the loan will be forgiven under the rules of the program. I say hopeful because i i cant be sure that will be the case. As i and my Operations Manager are just beginning the process we have found much to be done to clarify the terms of forgiveness and the process to obtain it. Its still unclear what the timeline is for begin the process, the steps we need to take to complete it or the criteria we will be judged on to receive forgiveness. The documents we have received thus far ive also raise concerns about the likelihood that the entirety of the loan will be forgiven. For example, it looks like we will be requested to provide information about our mortgage expenses during this time and expenses related to other fixed costs like utilities. We spent the entirety of the funds on paper also expect the the sum will be forgiven but the application leads us confuse, leads us concern that are spent on fixed cost will reduce a portion of what portion of the loan is forgiven. We are also concerned about the lack of clarity regarding any appeals process. What if we are requested to repay a a portion of the loan t believe a decision has been made in error . We have experienced other roadblocks in the forgiveness process. One members bank was contracted out the forgiveness processing to a thirdparty but the website that this thirdparty is built the process application now functions to the point of uselessness. Another ring member for reported application is the alternative date options in question because her payroll falls on the fifth and 20th rather than every two weeks. Several neighbors have received notice from the banks that forgiveness process will be put on hold indefinitely because legislation may change the rules regarding forgiveness. Other main Street Alliance members especially those in the Restaurant Industry have expressed concern they will miss out on forgiveness because they have not been able to rehire staff at the necessary level to qualify forgiveness because the business has not been picked up sufficiently to necessitate their prepandemic workforce. Our experience illustrates a process that is thus far been opaque, arbitrary and an even with private lenders choosing how and when they would implement the forgiveness portion of the program. This risk repeating the mistakes made in the design of all of the program itself which excluded fast portions of the Small Business sector often the most vulnerable businesses and as worse and economic inequality for businesses owed by people of color. I kept myself as one of the privileged business is he received federal funds and on grateful. Im also relatively confident those same privileges that help you access these signs funds wp in the process to get them forgiven. I know not every Small Business owner finds himself in this position. Many are going in this process and social self help of an expert staff member. I know if it were left for me to sort this process out i would be in far worse shape. Or these reasons main Street Alliance supports legislation that would provide automatic forgiveness for loans under 150,000. Given the confusion surrounding the process and shifting guidelines this would level access to forgiveness and alleviate stress for many Small Business and micro Business Owners. Particularly those with less access to support from the banks and accounts. Because most have now exhausted or ppp we believe the spartans plan to save our Small Business economy starts with grants, not loans. So i can cover payroll and keep people employed. This is an existential crisis for Small Businesses in america. I believe its not trickle down but rather trickle up economics that fuels our economy. Putting funds and hands of ordinary people puts money back into the economy and keeps america working. We are counting on our leader to take the bold action that this crisis requires. Thank you very much for your time and interest in main street Small Businesses. Thank you, mr. Parker, for your testimony. Appreciate that. We will now move over to mr. Patel. Mr. Patel, five minutes. Good morning, chairman kim, Ranking Member hern, and members of the committee. It is an honor to speak before you today and thank you for the opportunity to share my story with you. My name is pete patel, a proud first generation american. My family and i immigrated to the United States from india in 1979 in search of the american dream. We found in tulsa, oklahoma, as hotel years and small Business Owners. Im also a member of the asianamerican Hotel Owners Association which represents 20,000 members who own nearly 50 of all hotel Hotel Properties in United States. We own and operate franchised hotels in eastern oklahoma. During the past several years are businesses have done well. We have grown our operations and created and reacted to favorable economic conditions. Before the economic crisis caused by covid19, the lodging industry was enjoying record occupancies and profitability. Unfortunately, the current pandemic halted travel almost overnight. During our busy season our hotels should have occupancy about 80 . Instead we have been lucky to get 20 in some weeks. Our revenues have fallen by 50 . Most tragically we have had to lay off employees for the first time in my career because we simply dont have enough customers coming through our doors. At the onset of the virus and is traveled restrictions to cold, hotel years and Small Businesses needed a lifeline. Where grateful congressional leaders came together so quickly to pass the cares act. In particular appreciative congress prioritized assistant to Small Businesses and our employees. We use the ppp predominantly towards table and utilities. The ppp did have a few drawbacks, some of which could not of been known at the time is created. First, the maximum loan amount of 2. 5 times monthly payroll only carried us for a few months. Months. We are now at the end of that time and funds have been exhausted. We have reviewed the forgiveness process and it is proven to be exceedingly complicated. The guidelines for forgiveness were often unclear and fluid. The complexity of the forgiveness application portal for each business is also quite timeconsuming and burdensome. I would also like to note that the ppp funds have been crucial to the survival of our business. I understand there is discussion in congress about creating a second round of funding for Small Businesses that have suffered greatly because of the economic downturn. As Hotel Interest and has losta businesses season ended up facing a full time of year i strongly urge you and your colleagues to pass legislation that would authorize a second round of ppp to help us to save jobs and to save, to keep our businesses open. At the beginning of the crisis defer payment on principal and interest for a few months. Largely, however, that forbearance has run out and banks are telling us that our notes will come too soon because of the pressure they making regulators [inaudible] the main Street Lending program was designed to help small and mediumsize businesses survive by providing a critical bridge when they need it the most. Assetbased businesses have been excluded from participating in this program because of the underwriting methods employed by the federal reserve. Its Small Businesses like hotels that it suffered the most and it is unreasonable standard earlier this week secretary mnuchin, chairman powell asserted that conditions do not warrant expanding the main Street Lending program to include hotels and other assetbased businesses. I urge the members of this committee to work with your colleagues to expand the main Street Lending program for assetbased businesses like hotels. Chairman kim, Ranking Member hern, and members of the committee, i sincerely thank you for giving me the opportunity to share my perspective on the output of the lodging industry in the United States. I am grateful for your leadership and look forward to solutions you propose to help the country during this unprecedented pandemic. Thank you so much. Thank thank you, mr. Patel. Appreciate your testimony. We will move over to the question. Back and ill start by recognizing myself five minutes. As i mentioned earlier i do spend quite a bit of time Touching Base in my district ass a facing the challenge of your what ive heard from them is a message about what the future holds for Small Businesses and their employees. My focus here is our economic recovery touches everyone, not just those at the top, and we need to make sure the smallest businesses are being brought along with the covid19 recovery. The delivery of the ppp loans was a good first step but i worry the complicated teeth pil guidance of the loan forgiveness could become burdensome to the Business Owners that weve heard today. Getting the confirmation of forgiveness is critical to the businesses and i wanted to start with ms. Ozer about what you described. You described it in great utility and i want to pull out a few pieces here. As a season sba 7 a clinic and your fellow at the quality of the ppp loan forgiveness guidance you receive from sba and treasury and also can you also evaluate the userfriendliness that the loan forgiveness application for the average Small Business borrower . You touched on some of this in your testimony but i but i wano bring it out a little more. Thank you so much for your questions, and congressman kim, i do have 226 ppp loans in your district for over 48 million, so im quite familiar with the Third District in new jersey. That being said, to answer your question, and i know i did point this out in detail in my written, but the lack of guidance from the sba is something that i have never seen before in all my years, dealing with the sba. Their guidance is usually very prescriptive and clear. This is not the case with the ppp program. We understand the speed at which they had to give out guidance, but it has come piecemeal and it is confusing. If it is confusing for the lenders, that just translate to the borrowers. We can help our bar was if we are guidance. Thats what has been my opinion one of the biggest problems. The application itself is burdensome. As you just heard so eloquently from your three witnesses, every single one of them could point out the problems in the application process. Again i talked about the ez form which is not easy. Its just different and it still requires the same amount of documentation. I also talked about the problems in the ppp with the conflict of interest. He puts the lenders and it really bad position. We are unclear of our role. When we jumped into this with both feet because rats only wanted to support the communities that we leaned in, our borrowers, our customers an entire Small Business community because we are working through unprecedented times. But we were asked to be the conduit. We were not acting as lenders. We land but we were asked to simply pass on information and deliver funds through our networks that the government couldnt do. And this was the problem. Now theyre asking us to verify information and verify certifications and documentation from the borrowers. That puts us in a very unusual position because we would love to see every borrower have forgiveness, and would love to be reimbursed for all the money that we put out on the street. But theres no clear guidance. Thank you for that. Mr. Parker i wanted to turn you. I understand you have a businessman john steph was helping you with the loan forgiveness application process. I understand your four employees on staff, a true micro business. I can imagine without support staff how this process would be for you. Can you expound on the value of having someone on your staff with expertise on the business side to help you navigate this ppp application process, and what impact has had on your ability to focus on the revenuegenerating part of your business which is producing documentaries and digital video . Thank thank you, yes. I have been fortunate to have access to a fulltime person who is pretty much sole job is to take care of the financial aspects, to navigate the application process and all. But even she has a hard time getting information. I also have access to an account that i trust who is available to me. I am a producer of films so i am not an account. I was never trained in business. Every minute that i spend doing things that are not related bring income producing a program, is time taken away from reducing our income. So its been invaluable to access. Ive been very fortunate i understand any businesses do not have same benefit i had i i ner could have done it alone. I wouldve had to forgo the process, but its the amount that we did receive help us immeasurably. It enabled us to keep people on, and were going into a very busy time at the time covid hit. So i needed actually additional staff, and having his funds enabled us to maintain our business and to afford it, and to serve our customers. We are only come were unable to do the work if our customers need us. And so we are dependent on our customers the enable to pay a special. Its a full circle. The challenges of staffing during these particular times but also complicated issues. My time has expired several turn over to the Ranking Member, mr. Hern, you are not regular for five minutes. Thank you, mr. Chairman. Mr. Patel, as you described in your testimony Hotel Industry is very unique. This means you face specific challenges during an emergency crisis that crisis of industries may not have been confronting. Can you talk more about the environment in your territory in oklahoma, and the unique challenges you face, and your industry faces . Thank you, congressman herne. Yes, we are facing some deep challenges, primarily just having funding to continue with operations. Most hotels about the contrasting revenue drops anywhere from 50 to in some cases 80 . Some are still closed in major metropolitan areas. We predict that onethird of all of the hotels may see closure. And that is saddening to hear that an industry that has done so well and is my livelihood, thats the only livelihood i know, could see closures. We need congress to step in to give us some additional assistance. The pandemic is something that nobody asked for, and with regulations on closures and travel restrictions, we were probably the hardest hit industry out there. And so again without additional help there would be huge amount of closures and it will put our Community Banks who have been very generous to us when we decided to grow and borrow money, it will put them in a compromising position also. Thats some of the things we need to also keep in mind, its a trickle down, industries will be affected with what happens in the hospitality industry. Thank you so much, mr. Patel. Ive listen to all the testimony for intently, read it all prior to the Committee Hearing and it just want to say to each of you, thank you for what you have done to survive and continuing to survive. I know thats no way to run a business as i i mentioned beinn the smallbusiness arena for so many years. You would want to provide opportunities for your employees, opportunities for growth, promotion and also to expand your businesses. With that said i know many of you know that theres a roughly 135 million of unused pp p money out of it if we could for the essence of time i would like to get your thoughts on this. Just simple yes or no. Would you support a second round of ppp loans, extension of the ppp duration, expansion of coverage ppp expenses for ppp ppe in a simple thought forgiveness process mr. Patel, we will start with you. Would you support that . Yes. Mr. Parker . Absolutely, yes, i think so. Yes, i think it is important. Ms. Bonfig . I would be grateful to be able to participate in it again. Ms. Ozer . Conditional, yes, because until we fix the situation at hand, i think we would be, lenders are a bit reticent to jump back into the pool because the existing program has quite a few flaws, and especially the forgiveness process. We are stuck in a in a place we dont have their directions. We need a simplified process and procedure. We need to find linda roles. We need hold harmless for lenders. We need to strengthen the hold harmless provision that is in there. We need a guide that takes 27 i have ours and two rounds and put them in one document clear guidance here we has lenders can help our borrowers. We jump in with two feet but now we are so stuck in the mud and we need to get out and we want our borrowers to get out as well. I thank you for that what i know again having never ever bn politics before i became a member of congress lesson two years ago is about Small Business men and women in america dont care two hoots about politics. They just want to figure how quick and they can take care of their employees, their customers and grow their business. I would encourage us all to work hard on getting h. R. 8265 which is a lot of what ms. Ozer just said come to get on the floor for passage. I think would be overwhelmingly, overwhelming majority would pass and we get these other 135 billion out to folks like a witnesses. Mr. Chairman, i yield back. Thank you. Thank you, Ranking Memberthar hern. Im going to come over to congressman schneider or your comments or questions. Over to you for five minutes here. Thank you, chairman kim. I appreciate you posting this important hearing and i thank you as always for the entire committee and the Committee Staff for navigating this difficult dynamics of congressional oversight during this unique time. Data from the Small Business administration demonstrate Paycheck Protection Program helped save more than 90,000 jobs in my district alone. It was a crucial lifeline thousands of Small Businesses in illinois and around the country. I represent the suburbs of chicago. This month we experienced the week of unseasonable cold temperatures and it was a wakeup call as local brewery owner noted and put everybody unnoticed of what were going to do when it is 30 degrees outside and you can only operate at 25 capacity inside. As winter looms, the ppp fonts that of mimosa been depleted. Hope it is still coursing through our country and the pandemic is ravaging our economy. While the president and his initiation continue to play down the crisis, Small Businesses are struggling. Its not enough they struggle with the economic challenges of this crisis but they also have to necessary complexity associated with determining the eligibility for ppp forgiveness. This is a real challenge. We will never get through this crisis until we beat back the virus. But meanwhile we need to make sure were providing relief to our Small Businesses that they can continue to operate and provide medical jobs within our community. We need to work to get to recovery for these businesses can see their future and start to grow again, and ultimately most important get to a place to renew our economy. This cant happen without ongoing support so as others have noted im hopeful we can work to find a path to another relief package that will extend ppp and provide new resources for these businesses. But as we look at the current situation, if i can turn to ms. Ozer. As a lender you have seen firsthand how business of trying to navigate through this forgiveness process, the complexity. Do you have a sense of family after clients have had to con tract with outside help to get through the process of applying this contract. Thank you for the question, congressman. I do not have specific data on that but anecdotally i can tell you that it runs the gamut. As one of our witnesses suggested, the businesses with the wherewithal have certainly contracted with outside vendors. We know just simply from the amount of questions that come into our call center all of the borrowers need outside help. The ones that do not they needed the most are the ones with the least amount of capital go and hire outset of the what do they do . They look to the banks and that is problematic because we need to help them, and we dont have clear guidance. Thank you. Its the Smaller Companies like i say, the Smaller Companies dont have the resources, how are they applying for the forgiveness, or are they facing a situation when youre just expect them not pay back the loan . Well, the latter, unfortunate possibility. But we has the lender have, and they as the borrower, time and time again in the media theres going to be a streamlined forgiveness process which we are fully supportive of. This is automatic. We know the government needs to make sure they prevent against any kind of fraud and abuse but a streamlined process for the lenders and the borrowers to be able to help the smallest of borrowers is essential, and thats what were looking for. Streamlined application is critical. Youre trying to figure how to navigate the next few months. The services that you provide to parents. How do you see the Biggest Challenges looking ahead. Ics having positive cases. In continuing to charge the parents tuition so that we stay afloat some of them arent being paid and they are working at home by keeping their kiddos with us. We have to contact them. In a College Student got to make the decision to close us down. One of the classrooms for over seven days. And it cost us 8,000. How do we make that up. The challenge is real. We have some sort of an employment type thing where we can say we have a close this classroom because the amount of income tuition. We have some kind of help that we have the confidence to know it was there. It was so helpful to a lot of us and to keep us honest. I think parents are not to tell the truth about their kids being sick. That is my worry for us. It is important that we have clarity and had consistency in the application of these policies. I think the witnesses. We will turn it over to the congressman for five minutes. Thank you very much mister chair. Protection program which is provided a lifeline to Small Businesses across this nation has been shut down for 40 days now. The ppp is only shut down because of the willingness to bring meaningful legislation to the house floor. House floor. The speaker would rather use Small Businesses as political pawns rather than get things done. Hr 8265 the legislation that the Ranking Member introduced and i had cosponsored would reopen the ppe through the end of the year. It would also give the businesses the authority to receive a second loan. It would provide more flexibility in how dollars can be spent and it would simplify the forgiveness process. So instead of working on legislation that would bring more relief to 30 million Small Businesses across this great nation nancy pelosi and the democratic leadership has been focused on passing legislation that gives them cheap political talking points for this election cycle. In fact the speaker was so afraid that the legislation would pass that they canceled the session for today. She knew that her moderate members and the good colleagues on the other side of the aisle work in a working assignment petition which would force that bill to the floor and help Small Businesses across this great nation where the engine of our economy. We cannot lose sight of the american Small Businesses who are looking for us for Financial Relief in their most desperate hour which is why i find that this card position. Partisanship should have no place in these and it is my hope that we vote on this important legislation soon. With that being said i want to turn my questions to mister patel. And for the sake of time. I simply want a yes or no to the following questions if you are okay with that. So would it be helpful to Small Businesses to be able to apply for loans through the end of 2020 as would be the case if hr 8265 was signed into law . Congressman, absolutely. Would it be helpful for Small Businesses to have access to a second ppp loan as would be the case of hr 8265 if it was signed into law. Would it be helpful to Small Businesses to have more flexibility in the eligible expenses for the loan with the operation expenditures. In personal detective equipment. Would it be helpful to Small Businesses to have a simplified forgiveness process especially for loans under hundred 50,000 as would be the case hr 8265 was signed into law . Yes. It would seem to me that the answer is simple. Speaker pelosi needs to take swift action to help Small Businesses across this great nation rather than using legislation for cheap political bargaining chips. I request in demand that Speaker Pelosi bring hr 8265 to the floor immediately to help the Small Businesses across this great nation which still need our help. With that, mister speaker i yelled back. You are now recognized for five minutes. Were here to have you testify about your experience in august 20 my district alone they have received 304 million saving tens of thousands of jobs. For many the program has been a lifesaver. Ive actually talked with so many of them since the launch of ppp. He owns a Company Called boulder athletic wear. And they managed manufacture womens athletic wear. The program is a lifesaver for his business because it was an easy application process that provided a Quick Capital infusion. The biggest concern as he goes into the forgiveness process. Its made a Significant Impact the business has still not fully recovered it in the case of that majority business across the country. The biggest request has been for a second round of funding to help them as the f atomic recovery continues. My question is bank has approved nearly 11,000 loans for a total of almost 2 billion and that youve already received notices from many of your borrowers that had either closed their doors or filed for bankruptcy. My question to you is out of those 11,000 loans that they have approved. Do you have a specific figure or a sense for how many notifications like this your institution has received. How many of these businesses would you say at this point today had either closed their doors or filed for bankruptcy. I do not have the exact figure i had spoken with at least five different businesses that are planning to close however, there are borrowers out there that we dont know about. So i cannot put a figure on it. The problem is that without any direction on what to do it with these loans. If a borrower does go out of business we question how we collect the guarantee because there is no guidance on that. Your question about the exact numbers i dont know. We had chat rooms with lenders all across the country who have been experiencing this that businesses are closing and some of them are filing bankruptcy but theres also businesses that are trying to sell. Not enough guidance on what we should do for them. They need to strike while the iron is hot. And theyre unable to sell their business because there is no guidance on how they should do that. There is a lot of things that need to be fixed in this program. So that we can clearly help our borrowers. I appreciate that. I think your experience is consistent with my experience. And many of the lenders letters i had spoken with. And certainly the small Business Owners who i had spoken with. Decades of being open. Some of them generational businesses that they spent decades building and a lot of blood, sweat and tears i would also encourage as he just said a moment ago leadership in the house is set aside. As we lead up to the election. In the interests of the american people. Lets find out what they need to do to fix what the lenders are having for problems. I think in large part this would fix those issues. But lets hear the concerns in the cries that they are trying desperately to keep their business on been. With that i yelled of the remainder of my time. I have another question and i just wanted to throw this out there. Any other members had any further questions just let us know. I want to revisit something that you had mentioned. You were describing the complexity of that situation. I would just like to see if you could give me a little bit more about what you are saying about the complexity. And it doesnt naturally give you that much more leeway i just want to hear this in your own words. In your own experience. I started working on it. I created up spreadsheet to help me through. Summary dates and information that i needed to add in there. I have to go back and call the staff that was no longer with me and find out their information. In the long form. It was exhausting, it was frustrating, after having done a literally had just turned mine in. And the easy an easy form came out. You still have to do all of the work behind the scenes. They just changed the front page a little bit. Schedule a gives you six or seven little lines to put your staff in. When you had 30 plus staff youve to create your own spreadsheet. If to do what you have to do to get information together. How many people put this information together and they tried to apply for the forgiveness. Its a lot thats so confusing when you read it. I consider myself a dumb person. I dont consider myself a genius either but this should be easy enough for me to understand the first time i read it. I shouldnt had to pull back to it over and over again and say i dont understand what that means i dont understand what theyre asking for here. Its very confusing. I dont know how to help all the people we had been trying to help. If you read on the application the full time equivalent of safe harbor one. If you just take wait a second had to go back and do that again. That made no sense. The owner employee aspect of all that came through. That was very frustrating. I have a partner who is not an owner last year. But was an employee. I can only use this much of eight weeks of what she made last year. She was an owner. Eight weeks of zero still equals zero. And in the same regard i have a partner who was not an employee last year but is now he made zero last year. Zero times eight weeks is still zero. There is nobody answering these questions. I have a representative from the Small Business center email a member of the sba and the response we get back was working out with your lender. It is not an appropriate answer. It comes from the sba that is running the program. Thank you for your honest challenges in the sense of what is happening. My district has a lot of tourism aspect. With a lot of hotels in hospitality that are struggling. You know how difficult things had been. Folks are trying to do everything they can to make that important. The way in which you had been talking to. It has been incredible. You are seen across the board. Youre seeing this on a macro level which is helping fill out some of the conversations here. As a father of a 3yearold and a 5yearold i know how tough it is for Child Care Centers and youre trying to do everything you can to try to do this right. And keep our family safe. It is a tough business even in normal times. Thank you for what youre doing there. I really appreciate that. For us and congressman wayne. The solution for these seeking forgiveness. We have to keep in mind that complicity will be key for most Small Business. Like weve had today. The challenge of that many that we are facing. We are facing additional and unnecessary barriers. As they have come together before. With the easy forgiveness application. It is still not easy enough for the Small Business owner a lot more we have to do. Agencies should come together to provide application for 2 , the vast majority of borrowers. If the agencies insist on it members of congress on the committee will work in a bipartisan way to craft a solution to the problems. I ask unanimous consent the members have 5 legislative dates to support material for records. Without objection so ordered. If there is no further business before this committee we are adjourned. Thank you. [inaudible conversations] he is a look at our live coverage, on cspan the houses back at 9 am eastern for general speeches before returning to legislative business at 11 00. Members may consider coronavirus economic aid package that defines another round of direct payment and emergency funding for state and local governments, schools, Small Businesses, the Airline Industry and covid19 testing. At 7 00 pm eastern our campaign 2020 coverage includes donald trump and joe biden speaking at the annual Memorial Foundation dinner. On cspan2 at 10 am eastern a House Oversight hearing on Prescription Drug pricing, the Senate Returns at noon to consider moving forward with a bill from senator Chuck Schumer advancing the Justice Department from supporting lawsuits that strike down the Affordable Care act. On cspan 3, the Small Business Administration Inspector general testifies at the house subCommittee Hearing on preventing fraud and abuse within the paycheck protection loan program. There are several events streaming live on her website thursday at 9 15 eastern, Senate Armed Services subcommittee examines the Defense Department medical equipment supply chain during the coronavirus pandemic. At 10 405 am eastern House Speaker nancy pelosi holds her Weekly News Conference and at