202140 upon competition. Tips and more information on how to get started at a website, student cam. Org. The house Small Business subcommittee held a hearing on the Paycheck Protection Program also known as ppe. Small Business Owners testified about their experiences applying for ppe loan forgiveness. An excellent how this process could be confusing. We are meeting today to conduct an important hearing onl the Small Business administration Paycheck Protection Program or ppe. Specifically, a review of the loan forgiveness process. I want to thank each of the witnesses for their testimonies today. In the pastovas several months s committee has held numerous hearings on ppe. We have heard from borrowers and lenders about the challenges they face. Ive also traveled across counties in new jersey to speak with Business Owners about how e they fared during this pandem. And for some of them discuss the challenges they face with the ppe. In uncertainty about the futureo holds. Borrowers to eventually the one to access loans and the concerns about the complicated and sometimes conflicting program rules. And the requirements associated with loan forgiveness. Lendersle also expressed a great deal of frustration of the needlessly complicated role that reported feeling unable to adequately help out there borrowers throughout the forgiveness process. Borrowers simply wanted to ensure they were using loans for proceeds consistent with the laws so they could qualify for a enfull blown forgiveness. And effectively convert the loan into a grant which was the congressional. Loan forgiveness is a centerpiece of the Paycheck Protection Program especially since the expectation by any haborrowers and lenders was that the loans would be fully forgiven freighted less than full forgiveness for large body loans could have serious unintended, and consequences of borrowers lenders were developed in Business Plan around fullblownd forgiveness. As early as june, the fda treasury recognizes how challenging initial loan forgiveness application was. And released an easy Application Form. And partially borrowers and were likely, would call for a streamlined it Application Form for small dollars and ppe e parlors. In the meantime lenders have remained limited in their ability to provide guidance. They integrate anxiety. They just want to do things the right way. In any clear and simple rules of theda treasury in order to do so and finally we have some data to collaborate with learning community has been reporting an adult nightly this week and the Government Accountability office, and they published a new report showing that as of september 8, the sba can only received about 56000 forgiveness decisions from lenders and representing just over 1 percent of the over 5. 2 million ppe loans outstanding. This figure substantiates with the learning communities have been reporting and a dog lately. First the borrowers are struggling to simply understand the terms and data needed to accurately complete the forms in second the lenders are limited inin their ability to provide Technical Assistance to borrowers fighting the forms because of the insufficient guidance. So as we entered the forgiveness. , it is timely to conduct the hearing dedicated specifically for the loan forgiveness and that there subcommittee can assess the issues faced by the borrowers in the lenders and the proposals to provide relief for the borrowers deleted. I look forward to the discussion today and i think each of you again for taking the time to testify before us. And i now yield the Ranking Member for his opening statement. Thank you mr. Chairman. And thank you all for some very important and timely hearing. Small businesses across this nation my state of oklahoma to the germans district in new jersey have been disproportionally devastated by covid19. When restart country, congress acted fast. And numerous programs were created and amended to provide assistance to the American Public in ourur economy. One of thesese programs was the Paycheck Protection Program. In a matter of days, the department of treasury have outlined rules and regulations of the lenders can start assisting smallte businesses frm coasttocoast. The federal government move quickly i would like too commend them for that. It wherehe the top sba officials in charge of ppe testified yesterday and presented been ported information to our committee. Todays conversation will build on that hearing i will focus on the criticaln aspect of ppe loan forgiveness. A Small Business owner for 35 years of town of that local Community Bank in oklahoma, i see how difficult this process can be for borrowers and lenders alike. My goal now like to think its the same for all my fellow Committee Members is to make this process forgiveness process, simple as possible. Master lenders carry heavy burden Small Businesses are being crushed under circumstances out of their control. We went to them to discuss further ways to streamline the process. I personally roadblocksin contie tor enter how congress can provide for assistance while improving the program. Just slightly tried and failed to get a votet in congress hr 8265 that would improve extend popular i program. More work needs to be done and thats why this hearing is paramount. Its unfashionable that we would continue to ignore our smallest firms who desperately need his assistance. Any full rules of the road in order to make everyday Business Decisions changing guidance has seeking solutions of this process can be improved. Ice look forward to exploring ay of the topics today with our witnesses. Another are concerned that witness put forward a specific member of the house the way are entered the way their office conducts business. Even d though youre not here to defend themselves. We dont conduct business like that. We routinely strive to work in a bipartisan matter. We do not attack one another for political gain an extremely disappointed this is on the record. Truthfully they can be easily solved if the majority would allowri Ranking Members, hr 8265 to come for a vote. They would support it. All of them had the opportunity to allow this to sign petition which was bought invite earlier this morning. So i urge my colleagues to take action to help the Small Businesses across the country by signing the discharge on the common sense legislation which theyll support behind the scenes. I would also like to say this the second time that ive been disappointed by the majority selection of witness. I hope this is not a signal of the committee of becoming. Thank you mr. Chairman and i yelled backk. Read. Thank you i appreciate your comments. I would like to take ake momento explain how this hearing will proceed. Each witness will have five minutes to provide a statement and Committee Member will have five minutes for questions. Please ensure that your microphone is on when you be in speaking and that you return. Without like to introduce our witnesses before we begin. Our first witness today is miss lynn. She is the president of the sba lending department. Headquartered in lancaste, 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 of the board of directors of the National Association of guaranteed lender shes presently cochair of c the Technical Issues Committee while serving as an instructor for the negotiation. Our second witness is amy. [inaudible] she is the owner of Academy Childcare center in central minnesota. When few ppp has applied for loan forgiveness, she has not only completed the longer Application Form, but has also started an Informal Network of fellow Childcare Centers in minnesota to help them work through the application process. We look forward to hearing your feedback on the loan forgiveness application process ass a borrower and welcome you here today. Our third witness is mr. Jim parker a Small Business owner he is the founder and owner of studios that has 42 year veteran filmmaker but he has produced numerous broadcast programs for public television. During his career hes produced hundreds of multilingual documentary programs for corporate and nonprofitry clients. It is also face serious obstacles with the ppe forgiveness process and with forward to hearing his perspective on the issues as well. Thank you for joining us today from the new jersey congressional districts. I would now like to yield to the Ranking Member to introduce our final witness. Select thank you, mr. Chairman. Our next witness is pete battelle. Mr. Battelle is a ceo of Promise Hotels, Company Founded with his wife 12 years ago. Promise hotels is a Hospitality Business group rented doesnt hotels in the tulsa oklahoma area, mywi district. Hes a current board member of the Oklahoma Hotel and lodging association and the tulsa Hotel Lodging association for its also a former board member of the Tulsa Metro Chamber of commerce. Mr. Battelle we are grateful you can take the time away from running your businesses to talk with us this morning. We need you and the other witnesses are very busy so we appreciate all your time, well, we look forward to your testimony. Thank you we are going to start with with the witnesses, you are now recognized for five minutes. Civic thank you for inviting me in good morning everyone. My bank made nearly 2 billion of pvp loans serving 11000 Small Businesses that were desperate. Rent lenders stepped up to implement this congressionally provided lifeline we should applaud the countless Success Stories of businesses saved in employees but it has not been easy. There were front and issues, especially with eligibility as lenders rolled and simple no cost fixes are needed in any future program extensions. We must learn about what didnt work. When it comes from forgiveness significant concerns need to be addressed but continues to create confusion. Theres still no guidance for major issues and without answers i cannot help. We had no idea how a guaranty would be honored when a business ison personally action files for bankruptcy. Loans remain in w balance after forgiveness, we have no idea how we are expected to serve uethose loans longterm for about borrowers requesting permission to sell to new owners, we have no idea to how to help them. More importantly, borrowers are confused by the forgiveness process. And panic the loans they believed to be grants, if they followed the rules may become burdensome debts because they cannot go to thesedl paperwork. To remain confused about the cafeteria that has a document payroll expenses pretty specially they struggle with their local government shifting requirements. Theyre concerned about safe harbororla calculations one of r borrowers and i quote, i have tried and read many instructions regarding the forgivenesss application. But i still find it very confusing. Ive listened to multiple webinars i would love somebody to be able to translate that for me. This borrower is not a low but virtual all borrowers share this concern and so do lenders. To add to the confusion, borrowers and lenders have reports that congress will streamline forgiveness. Borrows delayed submitting applications hoping for that change. I urge quick authorization of the simplified forgiveness for small loans. Now they wind up with another easy form which really is noth making anything easier. But provides enormous relief. It clarifies the lenders role in the forgiveness process. Gao is a major problem. We believe it will be conduit for delivering scheduled assistance because we had the network and capacity the government did not have. Other than providing the capital quickly, our role as lenders it was to be limited. Only after we made millions that we learn we have to verify borrowers application that forgiveness could hinge on this. We have gone from being a conduit to being deeply involved in an ill designed process. At the heart of this issue, is the lender role as defined by the agencies creates an inherent conflict of interest. T. Lender blends we should not be the arbiter of receives forgiveness from the album and especially when our decisions determine whether our own funds or be reimbursed. To this and i urge you to clarify the lenders role the forgiveness process as part of anyy streamlined application for forgiveness. I also encourage you to encourage a section to better define the lender responsibility and verifying borrower provided documents and certifications. Lenders are on the front line in delivering this crucial aid. And we must fully understand our role to be comfortable helping our borrowers. Until the many issues are addressed, many will be reluctant to embrace their stance of a new program. Most will agree that we need to fully understand how the forgiveness process will work part how fda will honor its guaranty and the guided still to come will say before we can even consider participating a new programs orw extensions. Otherwise will nothe be able to give borrowers they are seeking and deserve but finally a reminder that the best tool to assist american Small Business longterm and good times and bad has always been the regular seven a loan. High lifted that lifted previously so wellin tough times we experienced before. E. It will work again. Supporting the seven a loan Program Means extending thes section 71112 debt relief payment which are hugely stabilizing. And have been for the existing portfolios and also encourage new lending. Funding remains for these 1112 payments. And i cannot think of a better tool to provide meaningful assistance to Small Business. Thankuc you so much and i look forward to your questions. Im going to turn it over now so you are recognized for five minutes. Good morning and thank you for giving me the time to share my experience with the ppp forgiveness application process. Im the owner of Little Academy t licensed Childcare Center in st. Joseph, minnesota part i honored to be chosen to speak to your committee to damn behalf myself, my lender, a Small Development center and Childcare Centers also been working with the director of the minnesota Central Region as it becomes available. The local office has been a vital resource for what is been happening over the last ten years and continues navigating to the hardship with us. From the start of the pandemic, Childcare Centers were asked to remain open and care for essential workers rechildren. With no guidance, our collaborative childcare professionals joined together seeking information, creating a safe space to ask questions to make decisions as a group for the children we care for, our staff and our businesses. With little to no financial aid, suddenly the Paycheck Protection Program is grateful to receive a forgivable loan. Through this process i aware of changes i create a spreadsheet for the group because it was a very lengthy application proces process. I met with him via zoom to make sense of it when i could barely make sense of it myself. I had spent months of my time over the days and several months focus on the success of our ppp loan and the forgiveness. It was incredibly timeconsuminhe timeconsuming. Over the time. After funds were nearly exhausted, the forgiveness application finally appeared which was completely mindboggling because we had to f be counted as full equivalents are loan application and then we could not count ourselves for safe harborha. Because of that i was unable to send my entire loan in eight weeks. Extending two weeks of the peril i can benefit from the entire loan. But we did not find out about the 24 week extension option until we were in that eight week and had exhausted most of our funds. After my covered. Ite acknowledged with the insurgency of covid19 and the ability to stay open or even meet fulltime equivalent safe harbor criteria i was too afraid to choose a 24 week option. Now the rules have changed again but the fda is not giving our needed lender information for my application. I do understand but without forgiveness the realities i have an unforgiven loans that was used to pay my staff the benefits they really should been able to get to the minnesota unemployment Payment Program for the childcare directors and owners that i bring with me today have expressed similar feel are of failure of loan forgiveness. We need to understand the complicated rules, the cryptic stipulations of the application, and most do not have the luxury of time to sort it all out. With that being said going to have a moment to advocate for the recognition of Small Business in the industry pretty specially after watching my brave and resilient time of sheer in the ch