GLI TO CONGRESS: GIVE BUSINESSES MORE FLEXIBILITY WITH PPP LOAN FORGIVENESS
In a letter to the greater Louisville congressional delegation, GLI urged Congress to give businesses more flexibility in how their Paycheck Protection Program loans can be forgiven. “Due to causes outside of their control, many PPP recipients in our region have expressed grave uncertainty about whether they will meet the program’s strict and often complex forgiveness requirements. GLI urges Congress to ease forgiveness requirements for PPP recipients and create more flexibility in how businesses can have their loans forgiven. This will help prevent future business closings and future economic damage,” wrote GLI President & CEO Sarah Davasher-Wisdom.
Over the past two weeks, GLI surveyed PPP recipients in greater Louisville, asking them if they will be able to meet their pre-pandemic employment levels in the eight-week period following the origination date of their loan. This is a key requirement for full loan forgiveness. Of the members GLI surveyed, only 38 percent were confident they would meet this requirement. Another 38 percent said no. The rest were uncertain.
Respondents listed numerous reasons for not being able to meet this key PPP forgiveness requirements, including:
- not being able to compete with compensation offered by state and federal unemployment benefits;
- their businesses were not allowed to operate during the eight weeks following the loan origination date;
- training restrictions;
- and a lack of available child care services.
Given the incredible circumstances that businesses are dealing with, meeting the full forgiveness requirements of PPP may be unachievable for as many as 60 percent of the businesses in our region. Penalizing these businesses will only harm our economic recovery. While steps taken by the U.S. Small Business Administration and U.S. Treasury to create more flexibility for businesses – including the June 30th Safe Harbor Rule for restoring full-time employees – have been helpful, much more is needed. Without action by Congress, thousands of small business owners may soon find themselves saddled with more debt and with no hope for weathering this crisis.
In the letter, GLI encouraged federal lawmakers to consider the challenges employers are facing in meeting PPP forgiveness requirements as Congress contemplates another Coronavirus relief package. Businesses should be given as much flexibility as possible in utilizing PPP funds to keep their businesses going without the threat of taking on additional debt. This will help more businesses survive the pandemic and prevent a long-term economic recession.