Transcripts For CSPAN2 House Hearing On Paycheck Protection Program 20240712

Without objection the chair is authorized to declare recess at any time. Let me begin by saying the practice will continue to apply during remote hearings. We must continue to the rules of the committee and the house. Members are reminded the technology they are utilizing today the committee will operate in accordance with Solutions Vendor the subsequent guidance with respect to the rights of all of the members that participate. Please keep your camera on and also to participate in others like this one they prevented them from being recognized in the questions and i would move to the next available member and recognize the time provided they return to the proceedings. I will recognize that for the remainder of the time and if they witness loses connectivity during the testimony or questioning. It from the seventh Congressional District beginning in 18871996 to take on that critical role. Being a member of the Small Business committee to serve as a chair of minority enterprise. I look forward to continuing with the Small Businesses across the country we are pleased to have you join us. That the outbreak of covid19 has led to unprecedented and then to address both but today we are focusing on Paycheck Protection Program created by the cares act. The Paycheck Protection Program with the Loan Guarantee program almost 350 billion the goal of the program is to save as many jobs as possible and as quickly as possible but to do so to guarantee 50 times as many loans with the entire 2019 we appreciate all the hard work and are equally grateful for those who participated during these Uncertain Times that it was found to be less than perfect. It with these areas of improvement in the first round of paycheckk Protection Program will expose some of those areas. For example too many momandpop shops were forced to sit on the sidelines and those receiving the loans. We will help congress will add more money to the program and the Paycheck Protection Program was signed into law. It with a Paycheck Protection Program funding. In the cdc micro loan intermediaries. And those 200 serve the community. Because of the lack of the clear guidance. Agency rules act again and the ppe flexibility act between eight weeks and 24 weeks. Also permitted with the greater portion of their loans that makes todays forum a tiny one about what has worked with the program. And how congress can keep optimizing as they slowly begin to reopen. And through some prospective borrowers. For example to establish a rule that requires and then to be eligible. And with that ability of any type of Small Businesses and with the ppe product as it enters the forgiveness phase the primary concern and with that forgiveness which according to experts it is a key feature of the program because we also heard minority owned Small Businesses and micro businesses continue to struggle with ppe loans despite 130 billion remaining in the program alone. And the treasury will not be publishing the information for ppe of the data that we need for the program. I look forward to hearing from our distinguished panel today about how congress can keep improving the ppe program and if congress should continue before the second round of funding or the program closes on jun june 30th thank you to the panel for joining us here today and i now yield to the Ranking Member for opening statements. Thank you madam chair for holding this hearing today. Also i want to extend our welcome. I was elected in 1994 he left 1996 i had the pleasure of serving one term with him and as former chair his portrait is on the wall in the Committee Room we want to welcome him back to the committee im sure you make a great contribution to Small Businesses all over the country on a different note again must register my concern about the continuing conducting of Committee Meetings by virtual format the house has important work that needs completed but yet we are forced to have these hearings virtually. With states and localities opening up is a concern the house of representatives remains a virtualal entity. I certainly dont hold the chair responsible for this obviously that is above her paygrade they think the speaker should make sure congress is in session. We have a lot of work to do. Im actually in the Visitor Center right now because we are holding a hearing here in washington relating to the George Floyd Killing and Congress Response to that and obviously there is legislation has legislation the administration offered their suggestions how to move forward the executive order yesterday so we are all discussing this right here in washington unfortunately other committees are not in session and they ought toon be. Relative to todays hearing the Paycheck Protection Program then a portal opened up on april 3rd it hasnt been that long in two months the sb approved and dispersed more than four. 5 million loans totaling half a trillion dollars. It has been a herculean effort by the sba which is a relatively small Government Agency working extremely hard and its incredible how much they have done according to the may employment report according to bls nonfarm payroll rose by two. 5 million and the Unemployment Rate declined at 13. 3 percent. Its good news that it went unfortunate it is still that high we have a lot of work to do to get that Unemployment Rate down and get the economy moving again. Clearly there is a long way to go but it appears the ppe has a major impact to save Many American jobs. I see enormous impact in my district in southwestern ohio with two dozen businesses including restaurants and learning centers and manufacturers and medical practices and manyic others on may 8 i had the honor and pleasure to visit the Animal Hospital in lebanon ohio and i asked the owner if he shared his experience with us and he will be one of our witnesses here today. We know the program has not been perfect especially Early Congress madere adjustments including the paycheck enhancement act and the flexibility act and these adjustments included expanded loan forgiveness from eight weeks up at 24 weeks with the option of the Small Business and what they determine is in their best interest have the interest to pick one back option to pick one or the other and also the loan amount that must be spent on non payroll cost ive heard from a lot of folks that will help. The ppe program is a result of work of congress and the esadministration we hope to achieve a delicate balance with flexibility and to protect the integrity of the Programs Mission to conduct needed oversight transparency is a hallmark of all Government Programs we must ensure transparency without compromising confidential information and personal information. Additionally a Small Business moves closer it will be instruments toll for members of congress to examine todays discussion and we are all committed to making sure this program has maximum impact for Small Business across the country thank you to the Witnesses Today and countless businesses providing feedback to me and other members of congress especially those on theof committee how the program has worked with them and their impact we have an Immediate Impact on the program for economic recovery and thank you for holding a hearing and i yield back. I like to take a moment to explain how the hearing will proceed. Each witness will provide a statement and each member will have five minutes of questions. Please ensure your microphone is on when you begin speaking in return to mute when finished. With that thank you to the witnesses for taking time out of their busy schedule to join us. And the proprietor and has a restaurant in maine after teaching across the world she opened a restaurant in 2000 with the help of the sba loan since then she hasnc partnered to open to additional locations and has been recognized for excellence. However the outbreak of covidien teen put her restaurant in jeopardy she took out the ppe loan with the hopes that it would save her business so thank you for joining us today our next witness is eduardo senior partner and resident from an independentt Community Bank in austin texas area of 5 million in assets. As a preferred lender with two years of experience with this program as we evaluate the ppe the third witness and the advocacy andoc senior counsel and research the Advocacy Organization to provide meaningful opportunities for asset building and economic security. Thank you for joining us today. Finally i will turn it over to the rankingit member who will introduce our last witness. Madam chair the final it is today is the the Animal Hospital in lebanon ohio completing his undergraduate studies at the university of cincinnati before graduating before Ohio State University college of veterinary of medicine in o 2002. December 2006 he took over the Veterinary Clinic he changed thehe name and build his facility in 2012 and beginner be model march 2019 so just last year to allow for more growth and opportunities and his clientele obviously none of us anticipated what was coming down the pike. As a dedicated Community Servant and sponsor of many local programs and then to speak of whats going on in the School System at that time also to meet his two delightful daughters and two cats although i dont think i met all of those that day to see how they benefited from the ppe. So thank you doctor for adding a senior great animal care facilityni alike forward and i yelled back. Thank you for being here. Good afternoon welcome to all members of thehe committee. And here in my kitchen and the corona pandemic changed all of that. I like to change my thoughts and concerns in three areas the industry at large and the effectiveness of the ppe loan i help people eat healthy and food and supporting the health of the planet. I also operated a small farm in the restaurant in maine. And on seasonal calendar and then steadily over the years and while on lockdown the first word was way people. I had no idea how long i would need to take before we could get back to work. And this is a big part of the reason why. My restaurant sees 155 inside we normally serveve over 32000 meals a week with an average earning 26 an hour revenue is mostly between july and october im here today not only representingg myself but for the Restaurant Industry in general i operate in maine that is dependent on revenue from seasonal terrace. And then the government mandated operations and regardless of the industry they may create financial stressors of their own when it was first offered i thought long and hard of that eligibility. Many operating cost many operating cost. [inaudible] with this timeframe and the last thing i need is more debt the restaurant has been closed due to state mandate the ppe loan allows us to bring back staff and to take out which is less than 20 percent of normal operations. And out to issue a new ruling to have for this calculation with 513,000 but only through. That time the restaurant was still for dine in that certainly would not have been forgiven. The recent passage of the Paycheck Protection Program flexibility act and those that were struggling during the pandemic. Went to increasese my loan at 400,000. But because my local bank did not form the file the form during 15 oh two i didnt qualify for sba so now i am recommending changes. [inaudible] your time has expired. Thank you for inviting me as a former migrant farmworkers than the last 25 years as an sba lender im especially honored to be here. Ly and with the participation with 3500 resulting over 477 million supporting over 50 that 7000 employees im grateful for congresses quick action to address the unemployed americans and understand why congress and the agency felt pressure to have guidance and have lenders implement the program immediately. That now pay the price we need to look at the middleground with common sense. Let me explain the first ppe guidance the final rules that have frequently changed never fully understood how to make a ppe loan from beginning to end. No windows. To issue seven weeks into the program after those to know the terms and conditions we still dont know how those decisions will be made we made clear and complete guidance. And now loans at 10 million and with that was eliminated. We believe congress intended most Small Businesses would certify to the necessity of the loan and with other available capital. But if they begin to highlight stories now requires the borrower selfassessed need with the elsewhere test. I watch my customers fearful that was 77 million of loan loans, 31 was repaid due to contradictory guidance. But the majority of those repaid was the smallest as well on a small is 1400 imagine their fear when the government said it must returnus funds or face serious consequences. The federal government said we are here t help and then who they intend to help the very businesses that invited to participate congress can require the ink agencies one that directly contradicts the statute and then with those forgiveness issues. And then with those borrowers forgiveness and then how to appeal adverse decisions. With the guidance to place a tremendous burden on borrowers o especially those with smaller loans. We need a simplified forgiveness process. I struck me on strongly recommend to create automatic forgiveness 550,000 or less. And limited liability to rely on borrower documents and certifications but the agency confuses this mandate and with the borrower certification but they must review those documentation and to not appropriately document it can be denied and then be increasingly worried when the rules are changing should we be surprised they are skeptical about any Program Expansion without the complete guidance provided first . Pr only now are we starting to get paid and were just learning the agencies are refusing to pay fees of and eligibility based on new interpretations that is unfair and unprincipled. Here is why we chose to participate we provided alone to a husband and wife owned bakery. One of the large youre funded private relief programs in the nations history. The program is in tended. It was built around Small Business owners so they and their employees but the execution rolloutut fell short creating a barrier for Small Business owners of color and that is what i hope to for you today. Theyve been hard hit by comparison declined by 17 . They are from the same community that was the most adversely affected by the Great Recession and they are the ones most likely to have been underserved. They didnt manage just the smallest businesses. On average they have fewer employees. The latest government study shows 95 of black owned businesses and 91 of latino, a these businesses are the least likely to be served. Business owners of color are less likely to have a relationship with t the lender d this is a sharp disadvantage especially in the opening round. Businesses of color have access to the loans and credit generally reedit the study between 20 of 82016. In 2185 of all loans were made and 9 made latino. Business owners of color are more likely to. The depository institutions are helping to increase access that have been hindered by unnecessary thresholds and other requirements. Finally it tracks the documentation requirement under care that they would find it extremely difficult and while it is an improvement it is still in the documentation. Last month the general reported despite the requirement of the act, the Treasury Department failed to issue guidance to prioritize underserved markets including mobile, minority and womenowned businesses. As of today, we get to see any guidance. Also noting they didnt collect standard d data. This made it unlikely they could determine certain markets. They havent equitably served. My testimony provides more detail to address the problem in support of color going forward. As we know theres equal access to the equal opportunity. Looking to address this and they deserve a response. I urge you to seize the moment t as well as other organizations that are ready to help. Its too late for many Small Businesses and those that remain cannot wait any longer. They are set to expire in two weeks and many will never recover. Thank you and i look forward to your question. I am honored to be here and thank you for allowing me to come before you as a representative. At the time of the purchase the practice was for 34 employees and 2012 we moved from a strip mall store to a stateoftheart 5400 square foot business corridor. For the past few years theres been an amazing level of growth as well as on a revenue standpoint. For the past few years theyve been able to ask if they could add additional staff members. One of the earliest to shut down fortunately we were still able to operate but with a few restrictions in place. We were fearful at any time we would have to shut down hospitals. The first heard about this on the news and reached out to start. Asking for any information they were getting along with the loan application and what it could look like. I have my numbers come from to pay an accountant on when it would be approved. Once they let me know that the applications were ready and quickly we signed documents and was funded. Even especially if they were able to come to work. On the unknown nature in the early stages anyone with a fever but no one in the hospital test of possible and able to return woto work. With the loan documents that they signed there was something which are bound to discuss the loan forgiveness. I looked at it as a lifeblood to provide for my staff and my family and if it was forgiven it would be a godsend. We received 206,000 the average was 206,000. The eightweek loan period ended on june 17, today. As allowed two weeks ago they opened an account only to be used for the loan fund that way there was complete transparency with every dollar that was used. They are still notre practicing but we are doing calls. The new Business Model has been amazing and reinventing itself and i cannot thank them enough. In conclusion the process couldnt have gone any further than it did. They are known for doing things at this speed and i was amazed at how quickly this came together. What an accomplishment if we all work together. Id like to thank the community and the National Bank for making this process as easy as possible and for how to navigate. Thank you again for having me. Because of the bipartisan effort they are able to go home every night and pete see their rent ad feed their family and more importantly, they have massive amounts ofer testing data. The secretary announced him as we both know with the conventional under which it is on the website. Can you expand on the issue of the reporting. Its definitely a big issue and apart from everything theyve done previously the demographic information is so important to know where the funds are going and where the communities are being served. Weve already heard at the businesses owned by people of color that are struggling and have not had access in this program have gone to institutions that have denied or never knew anything about the replication. Replication. Without this information from the sba itself,f, we cannot hold the sba accountable for the taxpayer investment. In the data reporting [inaudible] there might be some consideration as to the proprietary information that i dont want to get into any kind of political thing because im not a politician. I support publicly available information for oversight if somebody isnt playing by the rules they need to answer for that lack of rules. How many of your employees have you been able to maintain and do you think there would be a complete rehiring if the story begins toyo reveal complex like i stated earlier i am building an outdoor area because there are 50 guests inside and 50 outside. I intend to do inside slowly with caution [inaudible] its disproportionately affected the micro businesses. What needs to be done to ensure the other smallbusiness programs are assisting the knowledge of the Small Businesses . We ensure the remaining funds are getting to the Small Businesses. 1theres over 100 billion left and the program use needs to be expanded and reformed with the minimum origination fee set aside in all these things would help ensure the businesses are a people of color that have yet to be served by this program. We should expect the data as to the demographics and when they apply for those loans its how to determine if they are able to access what they need. The application as it is laid out his burdensome. We advocate for under 100 k. Indices are businesseinto theset will likely have 13 or fewer employees to survive and make it through this crisis. My time has now expired. The Ranking Member is next and they will recognize them for five minutes. Thank you madamam chair. I will begin with you. How much might it take to complete the forgiveness application process . The key was Small Businesses and we are not a fortune 500 company. We dont have accounts its going to make 400 independent family business. Im going to come back and now i have to do all this business work and sometimes the key is a way to outsource all those things so streamlining these would be g great to have the ful document here of what it was before and i said to my wife last night it was like a tax form. I missed a few of the words. I didnt know what they meant. I was concerned this would be a massive undertaking and something that would require doing the entire work for me. Nt considering the issue of guidance and to the interim financial rules with some form of competence of programs to guide would it be helpful to the lenders in your opinion . I think that you are on mute. I think that would be incredibly helpful. Under that program we have the Standard Operating Procedures that give us the guideline for that. In my opinion, you will find there will be lenders participating in greater numbers and particularly less concerned by having definite guidelines of what rules they can follow not only for the supplication before the business process and the applications that were issued this morning. Thank you very much. Are there issues you think the congress should address that they were going to be working towards . To revise and unmanned to provide additional funding to support the restaurant and hospitality businesses i try to give a brief description with all of the bipartisan work and continue to do it want you to think about restaurants in a different way after 30 years our industry is inst a crisis. All of the local businesses that we support, and we are in a crisis. Is congress examining the approximately 130 million still remaining where should we concentrate our efforts to produce the most impact for the Small Businesses . They should concentrate on ensuring they get to the smaller businesses with ten or fewer employees they are working with lenders in the underserved. The first is expanding the program to ensure that it can actually get to the community. Its great that its worked for some businesses are putting on acting business speak for themselves that changes need to be made to this program. Thank you. My time has expired. I will yield. Now we recognize mr. Goldin for five minutes. Madam chair i wanted to start flying playing i appreciate your experience from the lenders perspective that heard similar about the lack of clarity and hopefully we will see more people come forward [inaudible] dot setup for the smaller Business Owners in particular. Have youlk talked about this i wanted to ask if you knew any more a statistics. You watch portion would benefit from the . Only 83 . 83 of the parlors at 2,868 parlors and automatically on a National Basis which is an impact 80s 6 of the Business Loans would be forgiven. That is somewhat significant especially when you consider that only that represents 86 of loans and approximately 27 of the followers so theres still robust oversight availability as those would be forgiven. How might you estimate the number of hours in regards to the [inaudible] if you go back and use the three hours i sincerely and humbly admit its very low and they multiply that out times how many loans. I know there is 3 million just below 50,000. We are so glad to have you joining us. If you think about the next six to 12 months, talk more about what you need from congress and would help if you take the next steps to recovery. For me awad is unknown. We are approaching july. I have done all of business. We need support and to figure out a way to. A lot of employees dont want to go back to work when they are making over 100,000 a week to stay home. However i know the Workshare Program those are important in ways we can have please come back and share in the cost. They now recognize thehe gentle lady. [inaudible] yes, we can hear you now. Good afternoon depending on where you may be. I feel that you are stuck there and im enjoying this one. Nice. Thank you for organizing this hearing and thank you all for testifying today. Its been extremely helpful but like many great things we can always work to make it even better. Do you believe small s businesss were unaware of the Resources Available to them prior to covid19 . If you look at the data for and 2019, which is the largest Lending Program only 9 with latino Business Owners, i think there is more we can do to support even beyond. I think historically communities have lacked access in the traditional means in the Government Guarantee Program and we can get the businesses that havent been served despite the data and the transparency is also important so theres a number of ways to do this. Its not just about resources addressing the causes that extended to Small Business owners. Can you provide to the committee an overview of how its changed from the beginning to today . I am here. It eliminated. The agencies reinstituted the task by requiring Small Businesses to self certify that they needed the money and then they failed to provide a definition of what the need is and they started criticizing the Small Businesses for applying it scared several of the borrowers the way. I yield back. The gentle man from new jersey. Thank you madam chair for putting together this very important hearing one of the most important issues in my district in new jersey talking about reforms to the paycheck protection act and getting into the hands is the critical question. I thought you eloquently spoke to those challenges that are faced to make sure we get these funds to businesses by minority owned businesses and communities of color where people are in direi need. And other Industries Like nonprofit and medical providers and those that are in dire need of aid and with different aspects of reopening. And with upcoming stimulus bills and ppe is it beneficial to expand to other types ofr pe businesses . Its very important to reform to expand that current ppe moving forward we do need to think about programs that are straight up tradition all Grant Programs that are targeted to the businessesss in low income communities. There are ways to do that thinking about which agencies if they are alone program they are working with. There is a number of things to do with those efforts that havent been served and that the Paycheck Protection Program would help some but not for Small Businesses and we have to think about more creative ways moving forwardrd. And just needing to have that data what areas are getting hardest hit and to overlay that with these different sections to get back on their feet some get back earlier than others. I think we lost her. Im here. And with the seasonal issues my district is one its gea huge part in those similar situations and just to elaborate and with that seasonality of how the next couple weeks and months come to opening back up. We are already in the season here in maine its very daunting to be in that position at this point. We are living in a historic. Moment right now we need to expand ppe which may not be survivable for Small Businesses to depend on a certain window of time with the revenue that they make i think grants would be beneficial for different loans but somehow we have to capture the whole moment. Thank you for that. And earlier this week and dealing with outdoor seatingwi today. But restaurants cannot operate off of 30 or 40 percent capacity the margins are alreadyy hard enough so if i went to work with you and others i will yield back madam chair. And i recognize the gentleman from ohio. Madam chair, thank you very much. My first question is a few weeks ago i joined my colleagues who sit alongside me asking for simplified ppe application in a letter to the fda and treasury we voiced our concerns of the complexity of the 11 page ppe loan and we want the new simplified version be created like the irs 1040 ez form. Just this morning treasury released 35 oh eone 35 oh eight forgiveness application. This is a step in the right direction thank you to administration for making this update. Have either of you had a chance to take a look at the new easy form application . I apologize. I have not i was working this morning and came straight from appointments. But i did notice my email from one of my colleagues said that it passed this morning by the sba. I have not had a chance to look at it. Im sure is better than the 11 page document. But unfortunately i have not seeny it yet. I also was working im not had an opportunity to see it. I understand. Doctor coleman, thank you it is by this we work with the healthcare crisis to understand the Economic Impact this had on the nation Small Businesses any written taste testimony between Small Businesses in philanthropy and ppe and the documents that you signed over the last few weeks sba and treasury would love with the relevant to ppe forgiveness along with the application itself if we have an opportunity to go through this new information . If so what are some of your thoughts . As far as forgiveness the big key and i made a list of them first the ppe with the payroll is huge the issue we had as we were concerned about once we were funded is it eight weeks from that date so in the middle of the payroll cycle so we were a little off on schedule so flexibility from the tea on eight weeks through the 24 weeks we were actually holding back 5 percent of the loan as a precaution because we dont know where cove it willlmb go. The 25 to 40 percent we have been open the whole time w so our biggest deduction was from payroll. Er where others have had more of an issue paying rent because she didnt have as many employees on staff sweat 34 employees the entire time. That was perfect respite for another business that could be hugely beneficial to them they can wrap that 40 percent to keep the actual standing business open the extension to t is important now without fulltime equivalent and now we have an extra 600 that people are making on unemployment in getting people back is the hardest part people are coming back to work angry because they are making less money but they have to come back to their job or they could lose their job so that expiring will help but it gives us until january to give back. P. The other is a goodfaith every hiring if i am trying to rehire and i cannot i have done all these interviews i cannot get anybody, that will be a godsend for some of the businesses that cannot rehire but they have been trying. Those are examples i thought were fantasticic. Now we recognize the gentle lady from california. Thank you. Since the start of the covid crisis it has been a top priority to ensure sba loans and resources are provided in nonenglish languages. They care zach provided 25 million to develop these resources and the agency now posted several guides and translations in other languages including asian languages but the sba also provides proactive outreach to Small Business owners with limited English Proficiency to support the lenders responsible across the ppe application. Im interested in your perspective as a lender explain the process to have service in nonenglish languages and what sba has done . Unfortunately we have not received much guidance on the multiple languages available. In our footprint, the largest language is spanish. But we are very fortunate within our organization we have spent on several people who are spanishevni speakers that can deploy their talents to address the needs of the particular needs. You said ppe forgiveness application is so complex that Small Businesses need to hire a professional to help them understand it. Do you believe the sba has done enough to help Business Owners navigate the forgiveness application . You are correct. My view on the former 11 page application is extremely daunting and that forgiveness application that came out this morning is a step in the rightdi direction i only had an opportunity to review that personally so i cannot speak to it in detail but like anything else the devil is in the details and there is a couple of items in there still requiring all the same documentation as before. My recommendation to this committee and the congress is that the auto forgiveness legislation is passed to direct the agencies to set up the 150,000dollar automatic forgiveness of loans. Sba was directed by congress to prioritize underserved businesses including those owned by minorities and women and veterans and the administration of the ppe however when i chaired a forum last month with the sba Inspector General he tells me sba has not provided any formal guidance to lendersan but merely email the view emails and encourage them to serve the businesses. Can you explain what specific type of guidance sba should provide lenders to ensure they can prioritize underserved businesses . We have yet to see any of that guidance. They should provide guidance who they should be working sth and how important this is. The fact this is included in the cares act to let them be served is important that the sba did not reach out with specific information in different partners to work with and that Technical Assistance that was provided to universities but not through Community Based organizationsy and with other Community Partners and those who do a good job. There is so much sba could have done to ensure these communities did not do it is very simple things and to take steps to do so in addition to not collect the data itself. Thank you i yield back. I recognize the gentleman from oklahoma. I appreciate you having this hearing today. We have a hearing and before we do the simplified form comes out you should be happy about that dont we wish everything could happen with that speed. I really sympathize with each of you being a Small Business owner 35 years with the majority of that in the restaurant industr industry, it has been very difficult for everyone but specifically in the restaurant and hotel industry. Y. Im thankful we could find a way to get money to businesses very quickly by using our Financial Institutions out there and thankful what has been done with the ppe and i loans to help businesses stay in business as possible there will be many that will file for bankruptcy and that this pandemic has caused this to happen. The ppe loans in my state with roughly 5 billion in loans to help Small Businesses and we are appreciative of that money to help folks stay in business. As we know and sometimes forget, we put about 15 or 20 years worth of work and shoved it into a 12 week period and thats no easy task for any industry or business or lendingtu institution. I went to recognize the hard work of the staff and not to be critical because there has been minimal actual guidance and then to trickle out then and then those are the multiple releases that contradicteddr themselves the talking about this confusion your testimony none of us want to spend any time that what are the solutions you think sba couldem implement to affect the ppe program so we could help with the money we currently have and appropriated . I applied to increase my loan and then i was they already submitted the 1502 and then i was given a certain amount of money but then i was denied none of us got it for more than eight weeks. Give us your thoughts doctor coleman. What is out there right now from payroll to hit that in the Small Business community to say if you use 65 percent we will forgive 35 percent so there is a little more concerned where that goes everybody says the same thing so making that concrete with wine of these markers and the other big concern that i have is the foundation of the loan. And then if we reap a on the taxes thats not currently deductible then we are concerned we have 200,000 should we get that back to pay that tax back . Thank you chairwoman. And thank you for holding this hearing today there have been many challenges for those who tried to access the ppe program and more recent conversations donors may concerns are complexity around the loan forgivenessto the sba revised the forgiveness application to introduce a streamlined for borrowers but many challenges remain glad we have Small Business lenders and owners on the panel today. Do you believe the piecemeal nature from guidance has discouraged word this incentivize Small Businesses from entering the program . From the people that i didnt get it the biggest thing i heard that i dont know the rules so i dont want to take on that debt. Because it wasnt a slamdunk so i prefer not to take on any Additional Debt because that is scary to Small Business we have mortgages are taking on Additional Debt without concrete it is forgiven thats the biggest concern i would say that was confusion for the Small Businesses and people of color. That you figure out what forgiveness would lookat like and then to pay back in just over two years. We dont even know what next year will look like so the idea they would have debt to paid t back in two years is extremely scary and others that dont get talked about but the first week sole proprietors could not even apply forco the funding thats the vast majority who are selfemployed and this program is not for them and that does not work for them in the long run. R the pandemic has lasted longer than we expected and we just depend on 36 million tourists per year. With only one. 5 million residents in the state. We need that support because youre afraid. And we appreciate that recognition a Small Businesses and sole proprietors and particularly Small Business owners from marginalizedwn communities needing that and rollout. Small Business Owners servers some Business Owners are concerned and with the rollout of these programs to recognize they did need the relief. And with that. And now we recognize the gentleman from tennessee. I guess he stepped out to be recognize the gentleman from north carolina. The gentleman from tennessee is recognize. That. Ry about im trying to figure out zoom. Me . You hear i cant hear you but i read your lips i thank you said yes we can. I will go with that. Thank you so much. My question is the Culinary Institute of america graduate that was not alumni of the year as you were and i assume one day he will. We aspire to that. Was Small Business lenders we need a simplification and then writing the treasury to streamline forgivenesser project. On if anybody remembered his two lovelylo littleve girls they lost their mom and he lost his wife last night. But today there was a new easy forgiveness application so in your opinion are there roadblocks o what about for the loan forgiveness. And that easy form which i have not had an opportunity to review int depth. And it scares most people and as a step in the right direction and on that easy form to separate those instructions. Is still have certifications and the traditional documentation and to be included in that easy form. Highly disenfranchised i still think the best situation is to address we need effort on a mature forgiveness and you are forgiven in congress has the ability to do that. And an overview over ppe. At the beginning the statute eliminated. And then to certify that on application. Thank you madam chair percent. To follow up it sounds like to orme we could lose lots of business specifically with the pandemic and the ppe. So what percentage was lost . Its hard to tell that the numbers are very telling and the stories we hear a veryar telling. Active black Business Owners that has dropped by 41 percent. Looking at those that are high in so much higher and those that are already struggling before the pandemic with less than three weeks set to tsustain it. So now there are so many other issues in thishi country so many probably will not reopen and t are still waiting and as the pandemic stands at number will only increase how we make sure this works for the businesses. So take the next step in tell me specifically the kinds of things you think should happen. We have a minimum origination fee to streamline under 100 k that will save countless hours and then we estimate those spending thousands of hours of labor who have to provide that documentation. That makesda transparency so important. And in those underserved ndmarkets that low to moderate income and also thinking beyond loan programs through the federal government to review that intermediary requirements there is already issues to the mainstream lender with that lack of access of credit. We know there is already a barrier to access do that intermediary then lets remove that. The Title Program . Absolutely. A number of ways to think about with that Financial Institution as an thintermediary. Especially for people of color. Thank you very much. And now we recognize the gentlemans. Thank you manager when one dash chair man take you for the important conversation on the ppe program im in the Committee Room as i have been the previous meeting and was taken to task to make people disinfected but i do that for a very important reason that we can be in Washington People are in this room, three other people that are remaining away from me but we can do our business in washington and where our mask to make the meeting more effective and the testimony to be more effective. Thank you for being with us but as democratic members of the select subcommittee crisis this time aimed at secretary the munition when Congress Overwhelmingly passed the ppe in a bipartisan fashion last week the director of the cbo praise the treasury and Small Business administration for moving quickly and efficiently by also stating the stimulus went out faster than the stimulus of the 2008 financial crisis unfortunately my democratic colleagues who helped design the ppe Program Failed to recognize the Trump Administration swift action to save our economy there is more work to be done that democrats would rather investigate and undermine the good work and provide adequate recovery. Make no mistake their antics and sham investigations are not limited to the Trump Administrationve they want to investigate ppe lenders who served as a conduit to provide Small Businesses. Lenders did not ask for the role but they delivered. I heard from lenders throughout carolina they were nervous and skeptical. So in your testimony you worry the way the federal government is treating lenders to lead to less Lending Partners in the future you use the term a threat. Where do you agree that applies as it investigates lenders for the role of ppe . Im not a politician. When we put out a program regular sba we dont know what the rulesar are. To go through the process and collect thee loan. That is the process that assures oversight is fair to our communities. If we could get somethingth like that. And if the amarillo National Bank were asked to turn over all communications with treasury and sba related to administering ppea ppe, with that serve as a disincentive to your bank and those other lenders from doing business with the federal government in the situation . Let me ask a question for clarification. You want to know, you are asking if we give all the documentation that sba and treasury or the agencies used to direct thegr program . Your correspondence if there was a request to return all correspondence that you had that someone goes through with a fine tooth comb are you willing to cooperate in a program like thi this . We have been participating for at least 15 years. It would be a simple task. This doesnt include the supplemental that caused you sound difficulty. If you are overextended to decet would that be harmfulth to you . Time has expired the gentleman from illinois. Thank you mr. Wong madame chairwoman thank you for holding this hearing in the committeemm staff at the forefront. And allow us to have numerous briefings in a very difficult time. And with my district in particular as a lifeline for businesses i hear about it almost on a daily basis not only the covid pandemic that the lack of clarity on the ppe program. Working with the sba representatives with the Small Business Development Center to provide up to date guidance and that hard work of the staff might be a resource of dedicated employees but that guidance has been anything but clear was 17 interim rules on the program and application was 11 pages and released a week before they were eligible. This morning there was a shortened application process but im already hearing from say those that are starting to forgive loan forgiveness application and as the committee knows and of one individual when i hadd my own business i was doing the accounting myself. And its critical that loan forgiveness process is simple for the Business Owners can you provide some context and then as you look at the forgiveness process. [inaudible] [inaudible] [inaudible] and that process went very well somebody dad is ahead of the curve seeking out all the information to get everything out as soon as i could. There would be a frenzy even as a Business Owner to get the proper 941s and documents artogether that we are on track up in the eighties and as far asct payroll so we have a good chance of forgiveness we are holding back 5 percent of the loans and if anything happens and thats the best casese scenario. Thank you i appreciate your testimony we wish you all the best. And now we recognize a gentle lady from pennsylvania. We show the appreciation to you to make this look so easy and makequ this possible i can actually feel the tension and the pain even remotely in your testimony because i know how exasperating it is as a former Business Owner i can feel the pain i hope we can be helpful on this helpful to eliminate that. But the concept of forgiveness and i understand from a lot of others that testified that seems to be the line people draw that getting back to the testimony of where loans are going but its important to have transparency because i believe its not the last time to implement something to speed more expedient so anybody under 150,000 we lose all that granularity so if you wouldnt mind starting with mr. Sosa, kind of effort could we do to allow us to capture that data but not take that away to have that information . It is a challenge. If you just take 50000 or less that is a significant challenge for anyone 150,000 just to take care of the majority that there is nothing wrong of a simpleti certification that yes we spent the money. Thats what im asking with a chart that says 20 percent or 80 percent of the salary is that possible . It would be very simple and very appropriate. We just need to be sure to avoid the fact on this easy application it needs to be simpler than that so part ofo the concern that the Small Business person has a loan outstanding in one year from our two years from now for three years from now somebody change their mind if they are eligible at that point. I understand. And how important it is to track the data what can we implement legislatively . Is just important to know who god it and where it got spent. The simple certification form is what we absolutely support and with that data mine easy to fill out that the lenders themselves are directed with those small dollar loans it is something as simple as that but with that documentation requirements under the cares act so there has to be direction to borrowers to take place in that benefits the smallest businesses but also the transparency that you need. I know my time is expired so where the chair allow me a question i think im the last person. Yes maam. My question is i know right now youre trying to get your loans forgiven what is the biggest challenge to do that how you keep being track of all of the changes . To keep separate Bank Accounts and track everything. So to be helpful for a time. That then because of the filing of the 15 oh two. And that came through with a nice little newsletter that said these are the changes so thats one place to reach out to send this out to your clientele but it gave me a massive amount of information and does put my mind at ease where to go from here. My time has expired thank you. Thank you again to all the Witnesses Today for the testimony offering the views on the ppe and sharing your experiences we can have more effective oversight on the ppe program i am pleased that your testimony that are some issues that need to be addressed i assure you we will continue to make it as accessible to borrowers and lenders i ask unanimous consent there are five legislative days for the record without objection so ordered with no further business we are adjourned. Gton continues. Host joining us from new joining us from new york the hardest job in the world thee american presidency as a correspondent on cbs news thank you for being with us. Good to be with you. What surprised you the most researching this book . Its hard to know when i started i started 30 years or ten years