A Review of PPP Forgiveness (House Small Business subcommittee hearing, September 25, 2020)
Summary
The printed transcript of a hearing titled A Review of PPP Forgiveness, conducted September 25, 2020 before the Subcommittee on Economic Growth, Tax, and Capital Access of the House Committee on Small Business, 116th Congress (Small Business Committee Document Number 116–095). Opening statements are by Andy Kim and Kevin Hern. The witnesses are Lynn G. Ozer, President, SBA Lending, Fulton Bank; Amy Bonfig, owner of Little Saints Academy; Jim Parker of Riverview Studios; and Pete Patel of Promise Hotels. The transcript includes their prepared statements, questions from Hon. Sharice Davids with responses, and additional material from HOPE, the Independent Community Bankers of America and the National Association of Federally-Insured Credit Unions.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“A Review of PPP Forgiveness (House Small Business subcommittee hearing, September 25, 2020).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/a-review-of-ppp-forgiveness-house-small-business-subcommittee-hearing-b09e4ef2d3/
, SHA-256 e6fa61a9842e5829b5fc418bb3e50a7b15db158e62bcd0cf61871a5c44af825e.Full text
A REVIEW OF PPP FORGIVENESS
HEARING
BEFORE THE
SUBCOMMITTEE ON ECONOMIC GROWTH,
TAX, AND CAPITAL ACCESS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
HEARING HELD
SEPTEMBER 25, 2020
Small Business Committee Document Number 116–095
Available via the GPO Website: www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
41–469 WASHINGTON : 2021
SBD026 with DISTILLER
Congress.#13
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 F:\DOCS\41469.TXT DEBBIE
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
DAN BISHOP, North Carolina
MELISSA JUNG, Majority Staff Director
JUSTIN PELLETIER, Majority Deputy Staff Director and Chief Counsel
KEVIN FITZPATRICK, Staff Director
(II)
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 F:\DOCS\41469.TXT DEBBIE
CONTENTS
OPENING STATEMENTS
Page
Hon. Andy Kim ........................................................................................................ 1
Hon. Kevin Hern ...................................................................................................... 3
WITNESSES
Ms. Lynn G. Ozer, President, SBA Lending, Fulton Bank, Pottstown, PA ........ 5
Ms. Amy Bonfig, Owner, Little Saints Academy, St. Joseph, MN ...................... 7
Mr. Jim Parker, CEO & Director, Riverview Studios, Bordentown, NJ ............. 8
Mr. Pete Patel, President & Chief Executive Officer, Promise Hotels, Tulsa,
OK ......................................................................................................................... 10
APPENDIX
Prepared Statements:
Ms. Lynn G. Ozer, President, SBA Lending, Fulton Bank, Pottstown,
PA ................................................................................................................... 22
Ms. Amy Bonfig, Owner, Little Saints Academy, St. Joseph, MN ............... 37
Mr. Jim Parker, CEO & Director, Riverview Studios, Bordentown, NJ ...... 41
Mr. Pete Patel, President & Chief Executive Officer, Promise Hotels,
Tulsa, OK ....................................................................................................... 45
Questions and Answers for the Record:
Questions from Hon. Sharice Davids to Ms. Lynn G. Ozer and Responses
from Ms. Lynn G. Ozer ................................................................................. 48
Questions from Hon. Sharice Davids to Ms. Amy Bonfig and Responses
from Ms. Amy Bonfig .................................................................................... 50
Additional Material for the Record:
HOPE Testimony .............................................................................................. 52
ICBA - Independent Community Bankers of America .................................. 55
NAFCU - National Association of Federally-Insured Credit Unions ........... 58
(III)
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 0486 F:\DOCS\41469.TXT DEBBIE
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 0486 F:\DOCS\41469.TXT DEBBIE
A REVIEW OF PPP FORGIVENESS
FRIDAY, SEPTEMBER 25, 2020
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
SUBCOMMITTEE ON ECONOMIC GROWTH,
TAX, AND CAPITAL ACCESS,
Washington, DC.
The Subcommittee met, pursuant to call, at 9:30 a.m., Room
2360, Rayburn House Office Building. Hon. Andy Kim [chairman of
the Committee] presiding.
Present: Representatives Kim, Davids, Schneider, Delgado, Hern,
Stauber, and Spano.
Chairman KIM. Good morning. I call this hearing to order.
I want to thank everyone for joining us this afternoon for this of-
ficial hybrid hearing. I want to make sure to note some important
requirements.
Let me begin by saying that the standing House and Committee
rules and practice will continue to apply during hybrid proceedings.
All members are reminded that they are expected to adhere to
these standing rules, including decorum.
During the cover period as designated by the speaker, the Com-
mittee will operate in accordance with H. Res. 965 and the subse-
quent guidance from the Rules Committee in a manner that re-
spects the rights of all members to participate. House regulations
require members to be visible through a video connection through-
out the proceeding, so please keep your cameras on.
Also, please remember to remain muted until you are recognized
to minimize background noise. If you have to participate in another
proceeding, please exit this one and log back in later.
In the event a member encounters technical issues that prevent
them from being recognized for their questioning, I will move to the
next available member of the same party and I will recognize that
member at the next appropriate time slot provided they have re-
turned to the proceeding.
For those members physically present in the Committee room
today, we will also be following the health and safety guidelines
issued by the attending physician. That includes social distancing
and especially the use of masks. I urge members and staff to wear
masks at all times while in the hearing room, and I thank you in
advance for your commitment to a safe environment for all here
today.
We are meeting today to conduct an important hearing on the
Small Business Administration’s Paycheck Protection Program
(PPP), and specifically, a review of the loan forgiveness process.
(1)
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
2
I want to thank each of the witnesses for their testimonies today.
Over the past several months, this Committee has held numerous
hearings on the PPP, and we have heard from borrowers and lend-
ers about the challenges they have faced in accessing the program.
I have also traveled across my district of Burlington and Ocean
Counties in New Jersey to speak with business owners about how
they fared through the pandemic, and I have heard some of the
successes and challenges they face with the PPP and uncertainty
about what the future holds.
From borrowers who eventually did get access to loans, the Com-
mittee 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 need-
lessly 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 pro-
ceeds consistent with the law so that 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 Pro-
gram, especially since the expectation by many borrowers and lend-
ers was that the loans would be fully forgiven. Less than full for-
giveness for a large body of loans could have serious unintended
negative consequences for borrowers and lenders who have devel-
oped 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 ap-
plication form. Unfortunately, borrowers and lenders alike have re-
ported no material differences between the forms and calls for a
streamlined application form for small dollar PPP borrowers have
increased.
In the meantime, lenders have remained limited in their ability
to provide guidance to the 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 Govern-
ment Accountability Office (GAO) published a new report showing
that as of September 8th, SBA had only received about 56,000 for-
giveness decisions from lenders, representing just over 1 percent 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 form, and second, lend-
ers are limited in their ability to provide technical assistance to
borrowers completing the forms because of the insufficient guid-
ance.
So as we enter the forgiveness period, it is timely to conduct this
hearing dedicated specifically to loan forgiveness so that our Sub-
committee can assess the issues faced by borrowers and lenders
and weigh proposals to provide relief for borrowers who need it.
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
3
I look forward to the discussion today and thank each of you
again for taking the time to testify before us.
I now yield to the Ranking Member, Mr. Hern, for his opening
statement.
Mr. HERN. Thank you, Mr. Chairman. And thank you for hold-
ing this very important and timely hearing.
Small businesses across this Nation, from my state of Oklahoma
to the Chairman’s district in New Jersey, have been disproportion-
ately devastated by COVID-19.
When it reached our country, Congress acted fast. Numerous pro-
grams were created and amended to provide assistance to the
American public and our economy.
One of these programs was the Paycheck Protection Program. In
a matter of days, the SBA and the Department of Treasury out-
lined rules and regulations so that lenders could start assisting
small businesses from coast to coast. The Federal Government
moved quickly, and I would like to commend them for that.
One of the top SBA officials in charge of PPP testified yesterday
and presented important information to our Committee. Today’s
conversation will build on that hearing and will focus on the crit-
ical aspects of PPP loan forgiveness.
As a small business owner for 35 years and the founder of a local
community bank in Oklahoma, I can see how difficult this process
can be for borrowers and lenders alike. My goal, and I would like
to think it is the same for all of my fellow Committee members, is
to make this forgiveness process as simple and as efficient as pos-
sible. We ask our lenders to carry a heavy burden and our small
businesses are being crushed under circumstances out of their con-
trol. We owe it to them to discuss further ways to streamline the
process.
Unfortunately, roadblocks continue to hinder how Congress can
provide more assistance while improving the program. Just this
week, we tried and failed to get a vote on Congressman Steve
Chabot’s H.R. 8265 that would improve and extend the popular
program. More work needs to be done and that is why this hearing
is paramount.
It is unconscionable that we would continue to ignore our Na-
tion’s 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 has presented
challenges we need to seek solutions to so this process can be im-
proved.
I look forward to exploring many of the topics today with our wit-
nesses. However, I know there were some concerns that a witness
put forward about a specific member of the House and the way
their office conducts business even though this member is not here
to defend himself.
This, however, is not how we conduct business in this Com-
mittee. We routinely strive to work in a bipartisan manner. It is
important that we do. And we do not attack one another for polit-
ical gain. And I am extremely disappointed that my colleagues
would allow this testimony to be on the record.
Truthfully, many of the problems that our witnesses will bring
up today could easily be solved if the majority would allow Ranking
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
4
Member Chabot’s 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 a
vote by signing the discharge petition for 8265, which was filed by
Representative Jaime Herrera-Beutler earlier this morning.
So, I urge my colleagues to take action to help the small busi-
nesses in each of their districts across the country by signing the
discharge petition on the commonsense legislation, which they all
support behind the scenes.
I would also like to say that this is the second time that I have
been disappointed by the majority’s selection of a witness, and I
hope that this is not a signal of what the Committee is becoming.
Thank you, Mr. Chairman. I yield back.
Chairman KIM. Thank you, Mr. Hern. I appreciate your com-
ments.
I would like to take a moment to explain how this hearing will
proceed. Each witness will have 5 minutes to provide a statement,
and each Committee member will have 5 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. Ms. Ozer is president
of the SBA Lending Department at Fulton Bank, a $20 billion re-
gional bank headquartered in Lancaster, Pennsylvania. She man-
ages 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 magnum cum laude
from Temple University where she earned a BBA degree majoring
in accounting. Ms. Ozer served as the first female Chairwoman of
the Board of Directors of the National Association of Government
Guaranteed Lenders, and she is presently Co-Chair of the Tech-
nical Issues Committee while serving as an instructor for the asso-
ciation. Welcome, Ms. Ozer.
Our second witness is Ms. Amy Bonfig. Ms. Bonfig is the owner
of Little Saints Academy, a childcare center in Central Minnesota.
When so few PPP borrowers have actually applied for loan forgive-
ness, Ms. Bonfig 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 forgiveness
application process.
Ms. Bonfig, we look forward to hearing your feedback on the loan
forgiveness application process as a borrower and welcome you
here today.
Our third witness is Mr. Jim Parker, a small business owner
from my district. He is the founder and owner of Riverview Studios
and a 42-year veteran filmmaker. He has produced numerous
broadcast programs for public television. During his career, he has
produced hundreds of multilingual documentary programs for cor-
porate and nonprofit clients. He has also faced serious obstacles
with the PPP forgiveness process, and we look forward to hearing
his perspective on the issues as well.
Thank you for joining us today from the New Jersey 3rd Con-
gressional District, Mr. Parker.
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
5
I would now like to yield to the Ranking Member, Mr. Hern, to
introduce our final witness.
Mr. HERN. Thank you, Mr. Chairman.
Our next witness is Pete Patel. Mr. Patel is the CEO and presi-
dent of Promise Hotels, a company he founded with his wife 12
years ago. Promise Hotels is a hospitality business group that runs
a dozen hotels in the Tulsa, Oklahoma area, my district. With 25
years of experience, Mr. Patel is a current board member of the
Oklahoma Hotel and Lodging Association and the Tulsa Hotel
Lodging Association. He is also a former board member of the
Tulsa Metro Chamber of Commerce.
Mr. Patel, we are grateful that you can take the time away from
running your businesses to talk with us this morning. We know
that you and the other witnesses are very busy, so we appreciate
all of your time. Welcome, and we look forward to your testimony.
Chairman KIM. Thank you, Mr. Hern.
We are going to start with the witnesses here. So Ms. Ozer, you
are now recognized for 5 minutes and I am going to turn it over
to you. Thank you.
STATEMENTS OF LYNN G. OZER, PRESIDENT, SBA LENDING,
FULTON BANK; AMY BONFIG, OWNER, LITTLE SAINTS ACAD-
EMY; JIM PARKER, CEO AND DIRECTOR, RIVERVIEW STU-
DIOS; PETE PATEL, PRESIDENT AND CHIEF EXECUTIVE OF-
FICER, PROMISE HOTELS
STATEMENT OF LYNN G. OZER
Ms. OZER. Thank you for inviting me, and good morning, every-
one.
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 has not been easy.
There were frontend issues, especially with eligibility and lend-
ers’ roles and simple no-cost fixes are needed in any future pro-
gram extension. We must learn from what did not work.
When it comes to forgiveness, significant concerns need to be ad-
dressed now. Piecemeal guidance continues to create confusion.
There is still no guidance for major issues, and without answers I
cannot help my borrowers. We have no idea how a guaranty will
be honored when a business is permanently closed or files bank-
ruptcy. If loans have a remaining balance after forgiveness, we
have no idea how we are expected to service those loans long term.
For borrowers requesting permission to sell to new owners, we
have no idea how to help them.
More importantly, borrowers are confused by the burdensome
forgiveness process and panic that the loans they believed would be
grants if they followed the rules may become burdensome debt be-
cause they cannot muddle through the paperwork. Borrowers re-
main confused about the covered period and how to document pay-
roll expenses, especially if they struggle with their local govern-
ment’s shifting requirements. They are concerned about safe-harbor
calculations to help qualify for full forgiveness.
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
6
One of our borrowers summarized her angst. I quote, ‘‘I have
tried and read many instructions regarding the forgiveness applica-
tion but I still find it very confusing. I have even listened to mul-
tiple webinars. I would love someone to be able to translate that
for me.’’
This borrower is not alone. Virtually all borrowers share this
concern and so do lenders.
To add to the confusion, borrowers and lenders see media reports
that Congress will streamline forgiveness. Borrowers have delayed
submitting applications hoping for that change. I urge quick au-
thorization of a simplified forgiveness for smaller loans. This must
be prescriptive or we will wind up with another EZ form which
really is not making anything easier. Simplification would provide
enormous relief.
Congress must also prescriptively clarify the lender’s role in the
forgiveness process identified by GAO as a major problem. From
the outset, lenders believed we would be conduits for delivering
federal assistance because we had the network and capacity the
Federal Government did not have. Other than providing the capital
quickly, our role as lenders was to be limited.
Only after we made millions of loans did banks learn that we
would have to verify the accuracy of the borrower’s application and
that forgiveness could hinge on this. We have gone from being a
conduit to being deeply involved in an ill-defined process.
At the heart of this issue is that the lender role as defined by
the agencies creates an inherent conflict of interest. Lenders lend.
We should not be the arbiter of who receives forgiveness from the
government, especially when our decisions determine whether our
own funds will be reimbursed.
To this end, I urge you to clarify the lender’s role in the forgive-
ness process as part of any streamlined application for forgiveness.
I also encourage you to include a strengthened hold harmless sec-
tion to better define lender responsibilities in verifying borrower-
provided documents and certifications.
Lenders are on the frontlines 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 lenders will
be reluctant to embrace a new or expanded program. Most will
agree that we need to fully understand how the forgiveness process
will work, how SBA will honor its guarantees, and what the guid-
ance still to come will say before we can even consider participating
in new programs or extensions. Otherwise, we will not be able to
give borrowers the help they are seeking and deserve.
Finally, a reminder that the best tool to assist America’s small
business long term, in good times and bad, has always been the
regular 7(a) loans. We need the same temporary 7(a) enhancement
provisions like fee waivers and higher guaranty percentages that
have worked previously so well in tough times we have experienced
before. They will work again.
Supporting the 7(a) Loan Program means extending the section
1112 debt relief payments which are hugely stabilizing and have
been for the existing SBA portfolios and also encourage new lend-
ing. Funding remains for these 1112 payments, and I cannot think
of a better tool to provide meaningful assistance to small business.
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
7
Thank you so much, and I look forward to your questions.
Chairman KIM. Thank you so much for your statement there.
Appreciate it.
We are going to turn it over to Ms. Bonfig now, so you are recog-
nized for 5 minutes. Over to you.
STATEMENT OF AMY BONFIG
Ms. BONFIG. Good morning and thank you for giving me the
time to share my experience with the PPP forgiveness application
process.
My name is Amy Bonfig. I am the owner of Little Saints Acad-
emy, a licensed childcare center in St. Joseph, Minnesota. I am
honored to have been chosen to speak to your Committee today on
behalf of myself, my lender, a local small business development
center, and 30 fellow childcare centers in Central Minnesota.
I have also been working with Barry Kirchoff, the director of the
Minnesota Central Region SBDC to gather and share information
as it becomes available. Our local SBDC office has been a vital re-
source for Little Saints Academy over the last 10 years and con-
tinues navigating 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, our collaborative of childcare professionals joined to-
gether seeking information, creating a safe space to ask questions,
feel supported, and 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 became available
and I was incredibly grateful to receive a forgivable loan.
Through this process, I have kept myself and our group aware
of changes. I created 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.
I spent much of my time over the days and several months fo-
cused on the success of our PPP loan and the forgiveness. It was
incredibly time consuming, and at the end of our covered period,
after funds were nearly exhausted, the forgiveness application fi-
nally appeared but with a new term, ‘‘owner employees,’’ which was
completely mindboggling because we had to be counted as full-time
equivalents on our loan application and then we could not count
ourselves in the full-time equivalent count for Safe Harbor. Be-
cause of that I was unable to spend my entire loan in 8 weeks. Ex-
tending 2 weeks of the payroll, I can benefit from the entire loan
but we did not find out about the 24-week extension option until
we were in our eighth week and had exhausted most of our funds.
After my covered period, I had no choice but to lay off staff. With
the uncertainty of COVID-19 and the ability to stay open or even
meet the full-time equivalent Safe Harbor criteria, I was too afraid
to take the 24-week option. Now the rules have changed again but
the SBA is not giving my lender needed information to submit my
application.
I do understand the concept and the intention of the program,
but without forgiveness, the reality is I currently have an unfor-
given loan that was used to pay my staff the benefits they really
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
8
should have been able to collect through the Minnesota Unemploy-
ment Program.
The childcare directors and owners that I bring with me today
have expressed similar fear of failure regarding forgiveness. Many
do not 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, I want to steal a moment to advocate for
the recognition of small business in the childcare industry, espe-
cially after watching my brave and resilient colleagues step up dur-
ing this time of fear, uncertainty, and chaos. Please understand
that we need your support. We need peace of mind knowing that
our loans have been forgiven. As we look to the future financial
stability of our programs, we run our daily businesses on tight
budgets with our fingers crossed that we will make it financially
another day. We did this in the old normal and we are doing it in
the new normal.
We would like you to consider other expenses that may be relat-
able to forgiveness, such as PPE, thermometers, sanitizers, clean-
ing products, bleach, even professional cleaning services. For cen-
ters that do not qualify for the USDA food program, including the
cost of feeding the children would even help tremendously.
I would like for you to consider making this a simpler process.
The EZ form still needs many of the calculations in the long form
to fill out the application honestly and accurately. Six unrelated
date ranges to pull reports and gather required information from
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 allow-
ing me to speak to you on behalf of our situation as you move for-
ward with decisions about the PPP loan forgiveness.
Chairman KIM. Thank you, Ms. Bonfig. Thank you for sharing
your experiences there.
I want to turn it over to Mr. Parker. Mr. Parker, you are now
recognized for 5 minutes. Thank you.
STATEMENT OF JIM PARKER
Mr. PARKER. Chairman Kim, Ranking Member Hern, and mem-
bers of the Committee, thank you for the opportunity to speak to
you about our experiences with the Paycheck Protection Program
and the program’s loan forgiveness process.
My name is Jim Parker. I own Riverview Studios, a video pro-
duction company in Bordentown, New Jersey. I am a member of
the Executive Committee of the Main Street Alliance of New Jer-
sey, a network of small businesses in the Garden State and the
Chapter of the National Main Street Alliance.
Earlier this year I applied for PPP funds and received $11,200
through the program. Having used the PPP funds by early sum-
mer, I am now waiting to begin the process of closing out the loan.
In my case I am hopeful that 100 percent of the loan will be for-
given under the rules of the program.
Now, I say hopeful because I cannot be sure and say for sure
that that will be the case. As I and my operations manager are just
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
9
beginning the process, we found that much could be done to clarify
the terms of forgiveness and the process to obtain it.
It is still unclear what the timeline is for beginning 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 received from our bank thus far have also
raised concerns about the likelihood that the entirety of the loan
will be forgiven.
For example, it looks like we will be requested to provide infor-
mation about our mortgage expenses during this time and expenses
related to other fixed costs, like utilities. We spent the entirety of
the funds on payroll, so we expect the sum will be forgiven but the
application is confusing and leaves us concerned that our spending
on fixed costs will reduce a portion of what portion of the loan is
forgiven.
We are also concerned about the lack of clarity regarding any ap-
peals process. What if we are requested to repay a portion of the
loan but to believe that that decision has been made in error?
Small business owners in our network in New Jersey and nation-
wide have experienced other roadblocks in the forgiveness process.
One member’s bank has contracted out the forgiveness processing
to a third party but the website that this third party has built the
process applications now functions to the point of uselessness. An-
other member has reported that their application using the alter-
native dates option is being questioned because her payroll falls on
the 5th and 20th of the month rather than every 2 weeks.
Several members have received notice from their banks that the
forgiveness process will be put on hold indefinitely because pro-
posed legislation may change the rules regarding forgiveness and
other Main Street Alliance members, especially those in the res-
taurant industry have expressed concern that they will miss out on
forgiveness because they have not been able to rehire staff at the
necessary level to qualify for forgiveness because the business has
not picked up sufficiently to necessitate their pre-pandemic work-
force.
Our experiences illustrate a process that has thus far been
opaque, arbitrary, and uneven with private lenders choosing how
and when they will implement the forgiveness portion of the pro-
gram. This risks repeating the mistakes made in the design and
rollout of the program itself which excluded vast portions of the
small business sector, often the most vulnerable businesses and it
has worsened economic inequality especially for businesses owned
by people of color.
I count myself as one of the privileged businesses who received
Federal funds, and I am grateful. I am also relatively competent
that those same privileges that helped me access these funds would
help me in the process to get them forgiven.
I know that not every small business owner finds himself in this
position. Many are going into the process themselves without the
help of an expert staff member. I know if it were left to me to sort
this process out I would be in far worse shape.
For 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 guide-
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
10
lines, this would level access to forgiveness and alleviate stress for
many small business and microbusiness owners, particularly those
with less access and support from their banks and accountants.
And because most businesses have now exhausted their PPP, we
believe the smartest plan to save our small business economy
starts with grants, not loans, so we can cover payroll and keep peo-
ple employed through the pandemic.
This is an existential crisis for small businesses in America. I be-
lieve it is not trickle-down but rather trickle-up economics that
fuels our economy. Putting funds in the hands of ordinary people
puts money back into the economy and keeps America working. We
are counting on our leaders to take the bold action that this crisis
requires.
Thank you very much for your time and interest in Main Street
small businesses.
Chairman KIM. Thank you, Mr. Parker, for your testimony. I ap-
preciate that.
We are going to now move over to Mr. Patel. Mr. Patel, over to
you for 5 minutes.
STATEMENT OF PETE PATEL
Mr. PATEL. Good morning, Chairman Kim, Ranking Member
Hern, and members of the Committee. It is an honor to speak be-
fore you today and thank you for the opportunity to share my story
with you.
My name is Pete Patel. I am 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 it in Tulsa, Okla-
homa, as hoteliers and small business owners. I am also a member
of the Asian-American Hotel Owners Association which represents
20,000 members who own almost half of all the hotels in the
United States.
My wife tina and I founded Promise Hotels in 2008. We own and
operate franchise hotels in Eastern Oklahoma. During the past sev-
eral years, our businesses have done well. We have grown our oper-
ations and created and reacted to favorable economic conditions.
Before the economic crisis caused by COVID-19, the lodging in-
dustry was enjoying record occupancies and profitability. Unfortu-
nately, the coronavirus pandemic halted travel almost overnight.
During our busy season, our hotels should have occupancies at
about 80 percent. Instead, we have been lucky to hit 20 percent in
some weeks. Our revenues have fallen by 50 percent. Tragically, we
have had to lay off employees for the first time in my career be-
cause we simply do not have enough customers coming through our
doors.
At the onset of the virus and as travel restrictions took hold,
hoteliers and small businesses needed a lifeline. We are grateful
that congressional leaders came together so quickly to pass the
CARES Act. In particular, I appreciate how Congress prioritized
assistance to small businesses and our employees. We used the
PPP predominately towards payroll and utilities.
The PPP did have a few drawbacks, some of which could not
have been known at the time it was created. First, the maximum
loan amount of 2.5 times monthly payroll only carried us for a few
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
11
months. We are now at the end of that period and funds have been
exhausted.
Accordingly, we have reviewed the forgiveness process and it has
proven to be exceedingly complicated. From the time that PPP was
created, the guidelines for forgiveness was often unclear and fluid.
The complexity of the forgiveness application port of each business
is also quite time-consuming 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 busi-
nesses that have suffered greatly because of the economic down-
turn.
As the hotel industry has lost our busy season and are now fac-
ing our slowest time of year, I strongly urge you and your col-
leagues to quickly pass legislation that would authorize a second
round of PPP to help us to save jobs and to keep our businesses
open.
At the beginning of the crisis, our banks would work with us to
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 due soon because of the pressure there
from banking regulations.
The Main Street lending program was designed to help small and
medium-sized businesses survive their crisis by providing a critical
bridge when they needed it the most. However, asset-based busi-
nesses have been excluded from participating in this program be-
cause of the underwriting methods employed by the Federal Re-
serve. It is small businesses like hotels that have suffered the most
in this unreasonable standard.
Earlier this week, Secretary Mnuchin and Chairman Powell as-
serted that conditions do not warrant expanding the Main Street
Lending Program to include hotels and other asset-based busi-
nesses. I urge the members of this Committee to work with your
colleagues to expand the Main Street Lending Program for asset-
based businesses like our 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 outlook 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 unprece-
dented pandemic.
Thank you so much.
Chairman KIM. Thank you, Mr. Patel. I appreciate your testi-
mony here.
We are going to move over into the question period, and I will
start by recognizing myself for 5 minutes here.
As I mentioned earlier, I have spent quite a bit of time touching
base and visiting a lot of small businesses in my district as they
are facing these challenges. And what I have consistently heard
from them is a message about unease about what the future holds
for small businesses and their employees. My focus here is that our
economic recovery touches everyone, not just those at the top, and
we need to make sure that the smallest businesses are being
brought along in the post COVID-19 recovery. The delivery of the
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
12
PPP loans was a good first step, but I worry that the complicated
piecemeal guidance of the loan forgiveness could become burden-
some for the business owners that we have heard today.
Getting that clear information of forgiveness is critical to the
businesses, and I wanted to start with Ms. Ozer about what you
described because you described it sort of in great detail here and
I just wanted to kind of pull out a few pieces here.
As a seasoned SBA 7(a) lender, can you evaluate the quality of
the PPP loan forgiveness guidance you have received from SBA and
Treasury? And also, can you also evaluate the user-friendliness of
the loan forgiveness application for the average small business bor-
rower? I know you touched on some of this in your testimony but
I just want to kind of bring it out a little bit more here.
Ms. OZER. Thank you so much for your question. And Congress-
man Kim, I do have 226 PPP loans in your district for over $48
million. So I am quite familiar with the 3rd 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 certainly
understand the speed at which they had to give out guidance but
it has come piecemeal and it is confusing. And if it is confusing for
the lenders, that just translates to the borrowers. We cannot help
our borrowers if we ourselves do not understand the guidance. So
that is what has been in my opinion one of the biggest problems.
The application itself is burdensome. As you just heard so elo-
quently from your three witnesses, every single one of them can
point out the problems in the application process. Again, I talked
about the EZ form, which is not easy. It is just different. And it
still requires the same amount of documentation. And I also talked
about the problems in the PPP. With the conflict of interest it puts
the lenders in a really bad position. We are unclear of our role. You
know, when we jumped into this with both feet because we abso-
lutely wanted to support the communities that we lend in, our bor-
rowers, our customers, and the 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 lend
but we were asked to simply pass on information and deliver funds
through our network that the government could not do. And this
was a problem. And now they are 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 we would love to be reim-
bursed for all the money that we have put out on the street. But
there is no clear guidance.
Chairman KIM. Thank you for that.
Mr. Parker, I want to turn to you. I understand you said you
have a business manager on staff who is helping you with the loan
forgiveness application process. I also understand you have four
employees on staff, a true microbusiness. I cannot imagine that
without that support staff, you know, how this process would be for
you. So can you expand on the value of having someone on your
staff with expertise on the business side of things to help you navi-
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
13
gate this PPP application process? And what impact has that had
on your ability to focus on the revenue generating activities of your
business which is producing documentaries and digital video?
Mr. PARKER. Thank you. Yes.
I have been really fortunate to have access to a full-time person
whose 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 the information. I also have access to an account-
ant that I trust who is available to me. I am a producer of films.
I am not an accountant. I was never trained in business, so every
minute that I spend doing things that are not related to producing
a program is time taken away from reducing our income.
So it has been invaluable to have access. I have been very fortu-
nate. I understand that many businesses do not have that same
benefit that I have. I never could have done it alone. I would have
had to forgo the process but the amount that we did receive helped
us immeasurably. It enabled us to keep people on, and we were
going into a very busy time at the time COVID hit. So I needed
actually additional staff. And having these funds enabled us to
maintain our business and to pivot and to serve our customers. We
are only able to do the work if our customers need us. And so we
are dependent on our customers being able to pay us as well. So
it is a full circle.
Chairman KIM. Well, it certainly hits the challenges of staffing
during these particular times but also needing to focus bandwidth
on these complicated issues.
My time has expired so I am going to turn it over to the Ranking
Member. Mr. Hern, you are now recognized for 5 minutes.
Mr. HERN. Thank you, Mr. Chairman.
Mr. Patel, as you described in your testimony, the hotel industry
is very unique. This means that your industry has faced very spe-
cific challenges during the emergency crisis that other industries
may not have been confronting. It comes from debt service. Can
you talk more about the environment in your territory in Okla-
homa and the unique challenges that you face and your industry
faces?
Mr. PATEL. Thank you, Congressman Hern.
Yes. We are facing some deep challenges, primarily of just having
funding to continue with operations. Most hotels throughout the
country have seen revenue drops anywhere from 50 percent to in
some cases 80 percent. Some are still closed in major metropolitan
areas.
We predict that a third 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, that is 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 reg-
ulations on closures and travel restrictions we were probably the
hardest hit industry out there. And so again, without additional
help there will be a huge amount of closures. And then it will put
our community banks who have been very generous to us when we
decided to grow and lend more money, it will put them in a com-
promising position also. So I think that is some of the things that
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
14
we need to also keep in mind is it is a trickle down. Other indus-
tries will be affected with what happens in the hospitality industry.
Mr. HERN. Thank you so much, Mr. Patel.
I have listened to all the testimony very intently, read it all prior
to the Committee hearing, and I just want to say to each of you,
thank you for what you have done to survive and continuing to sur-
vive. I know that is no way to run a business. As I mentioned being
in the small business arena for so many years, you really 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 there is roughly
$135 billion of unused PPP money that is out there, and if we
could, for the essence of time here, I would just like to get your
thoughts on this. Just a simple yes or no, we will move through.
Would you support a second round of PPP loans, extension of the
PPP duration, expansion of covered PPP expenses for PPE, and a
simplified forgiveness process?
Mr. Patel, we will just start with you since we are talking al-
ready. Would you support that?
Mr. PATEL. Yes.
Mr. HERN. Mr. Parker?
Mr. PARKER. Absolutely. Yes, I think so. I think it is important.
Mr. HERN. Ms. Bonfig?
Ms. BONFIG. I would be grateful to be able to participate in it
again.
Mr. HERN. Ms. Ozer?
Ms. OZER. Conditional, yes, because until we fix the situation at
hand I think 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 place where we do not
have clear directions. We need a simplified process and procedure.
We need to define lender 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 IFRs and two rounds of FAQs and
puts them into one document with clear guidance so we as lenders
can help our borrowers. We jump in with two feet but now we are
sort of stuck in the mud and we need to get out and we want our
borrowers to get out as well.
Mr. HERN. Well, I thank you for that. And what I know, again,
having never been in politics before I became a member of Con-
gress less than 2 years ago, is that small business-men and women
in America do not care two hoots about politics. They just want to
figure out how again they can take care of their employees, their
customers, and grow their business. And I would encourage us all
to work hard on getting H.R. 8265, which does a lot of what Ms.
Ozer just said, to get it on the floor for passage. I think it would
be an overwhelming majority that would pass it and we can get
these other $135 billion out to folks like our witnesses.
Mr. Chairman, I yield back. Thank you.
Chairman KIM. Thank you, Ranking Member Hern.
We are going to turn it over to Congressman Schneider for your
comments and questions here. It will be you for 5 minutes.
Mr. SCHNEIDER. Thank you, Chairman Kim. And I appreciate
you hosting this important hearing, and I thank you as always and
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
15
the entire Committee and the Committee staff for navigating the
difficult dynamics of congressional oversight during this unique
time.
Data from the Small Business Administration demonstrates that
the Paycheck Protection Program helped save more than 90,000
jobs in my district alone. It was a crucial lifeline to thousands of
small businesses in Illinois and around the country.
I represent the suburbs of Chicago. Earlier this month, we expe-
rienced a week of unseasonable cold temperatures and it was a
wakeup call as local brewery owner noted, it put everybody on no-
tice of what we are going to do when it is 30 degrees outside and
can only operate at 25 percent capacity inside.
As winter looms, the PPP funds have now been mostly depleted.
Meanwhile, COVID is still coursing through our country and the
pandemic is ravaging our economy. While the President and his ad-
ministration continue to play down the crisis, small businesses are
struggling to see the path through.
It is not enough that they struggle with the economic challenges
of this crisis; they also now have to deal with the unnecessary com-
plexity associated with determining their eligibility for PPP forgive-
ness. 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 that we are providing
relief to our small businesses so that it can continue to operate and
provide critical jobs within our community.
We need to work to get to the recovery where these businesses
can see their future and start to grow again. And ultimately, most
importantly, get to a place where we knew our economy.
But this cannot happen without ongoing support. So as others
have noted, I am hopeful that we can work to find a path to an-
other elite 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 businesses are trying to
navigate through this forgiveness process, the cost of the com-
plexity for that. Do you have a sense of how many of your clients
have had to contract with outside help to get them through the
process of applying for forgiveness?
Ms. OZER. 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 busi-
nesses with the wherewithal have certainly contracted with outside
vendors. We know just simply from the amount of questions that
come into our call center that all of the borrowers need outside
help. The ones that need it the most are the ones with the least
amount of capital to go and hire outside help. So what do they do?
They look to the bank. And that is problematic because we need
to help them and we do not have clear guidance.
Mr. SCHNEIDER. Thank you. And then the smallest of compa-
nies that do not have the resources, how are they applying for the
forgiveness? Or are they facing a situation where they are just
going to be stuck having to pay back the loan?
Ms. OZER. Well, the latter is an unfortunate possibility. But, we
as the lender have, and they, as the borrower hear time and time
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
16
again in the media that there is going to be a streamlined forgive-
ness process which we are fully supportive of. This is not auto-
matic. We know the government needs to make sure that they pre-
vent against any kind of fraud and abuse. But a streamlined proc-
ess for the lenders and the borrowers to be able to help the small-
est of borrowers is essential. And that is what we are looking for.
And honestly, the amount of people that have not applied for loan
forgiveness is pretty high compared to those who can because they
are all still hoping for the streamline forgiveness because they are
not getting the answers from the lenders because the lenders do
not have the answers to give them. So a streamlined application is
critical.
Mr. SCHNEIDER. Okay. Thank you.
In the last few seconds I had, if I can turn to Ms. Bonfig and
thank you for sharing your story. You are trying to figure out how
to navigate the next few months but the services you provide to
parents who are trying to get back to work are also critical. Or do
you see the biggest challenges looking at——
Ms. BONFIG. I see us having positive cases being a huge chal-
lenge and continuing to charge the parents tuition so that we stay
afloat. Some of them are not being paid and they are working at
home but keeping their kiddos with us. We had a positive case and
we had to contact the Minnesota Department of Health and a col-
lege student working for the Department of Health got to make the
decision to close us down. And that was very frustrating. We had
to close one of our classrooms for over 7 days and it cost us about
$8,000 but, you know, how do we make that up?
Mr. SCHNEIDER. So that challenge is real.
Ms. BONFIG. I actually am part of a group that meets with the
Governor’s Children’s Cabinet in Minnesota. And we have talked
extensively about having some sort of a program like unemploy-
ment for childcare, and maybe it is not the childcare but that is
who we are dealing with right now. That maybe we have some sort
of an unemployment-type bank where we can call in and say, okay,
we had to close this classroom for 7 days. This is the amount of
income, tuition that we had to forgo, and have some kind of help
that we have the confidence to know it is there. It would be so
helpful to a lot of us. And keep us honest. That is one of the biggest
things that I fear is that parents are not going to tell the truth
about their kids being sick. Providers are not going to be honest
about sickness in their center because they are fearful of losing in-
come. And that is probably not just in our industry but that is my
worry for us.
Mr. SCHNEIDER. No, I appreciate that. And I am over time so
I appreciate the time. It is just important that we have clarity, that
we have simplicity, and we have consistency in the application of
these policies.
So I thank the witnesses. I yield back the balance of my time.
Chairman KIM. Thank you for yielding back.
We are going to turn it over to Congressman Stauber. Over to
you for 5 minutes.
Mr. STAUBER. Well, thank you very much, Mr. Chair.
You know, I sit here dumfounded. The Paycheck Protection Pro-
gram, which has provided a lifeline to small businesses across this
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
17
Nation during this pandemic has been shut down for 48 days now.
With over $135 billion in funding, the PPP is only shut down be-
cause of speaker Pelosi’s unwillingness to bring meaningful legisla-
tion to the House floor. The speaker would rather use small busi-
nesses as political pawns rather than get things done.
H.R. 8265, the legislation that Ranking Member Chabot intro-
duced and I have cosponsored, would reopen the PPP through the
end of this year. On top of that, it would give small businesses the
ability to receive a second loan. It would provide more flexibility in
how PPP dollars can be spent, and it would simplify the forgive-
ness process.
So instead of working on legislation that would bring more relief
to 30 million small businesses across this great Nation, Nancy
Pelosi and democrat leadership have been focused on passing legis-
lation that gives them cheap political talking points for this elec-
tion cycle. In fact, the speaker was so afraid that the PPP legisla-
tion would pass, she canceled a session for today. She knew that
her moderate members and my good colleagues on the other side
of the aisle were going to sign that discharge petition which would
force that bill to the floor and help small businesses across this
great Nation who are the engine of our economy. And we cannot
lose sight of the American small businesses who are looking to us
for financial relief in their most desperate hour, which is why I
signed that discharge petition this morning. And that calls for the
immediate consideration of H.R. 8265. Partisanship should have no
place in these halls during this pandemic and it is my hope that
we vote on this important legislation soon.
So with that being said, I want to turn my questions to Mr.
Patel. Mr. Patel, thank you for being here, and for the sake of time
I simply want a yes or a no answer to the following questions if
you are okay with that.
So Mr. Patel, would it be helpful to small businesses to be able
to apply for PPP loans through the end of 2020 as would be the
case if H.R. 8265 was signed into law?
Mr. PATEL. Congressman, absolutely, yes.
Mr. STAUBER. Okay. Mr. Patel, would it be helpful to small
businesses to have access to a second PPP loan as would be the
case if H.R. 8265 was signed into law?
Mr. PATEL. That would be greatly needed for our industries and
many other industries. Yes.
Mr. STAUBER. Mr. Patel, would it be helpful to small businesses
to have more flexibility in the eligible expenses for their PPP loan
such as operation expenditures, property damage costs, and per-
sonal protective equipment as would be the case if H.R. 8265 was
signed into law?
Mr. PATEL. Yes.
Mr. STAUBER. Mr. Patel, would it be helpful to small businesses
to have a simplified forgiveness process especially for loans under
$150,000 as would be the case if H.R. 8265 was signed into law?
Mr. PATEL. Yes.
Mr. STAUBER. You know, 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 and demand Speaker
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
18
Pelosi bring H.R. 8265 to the floor immediately to help the small
businesses across this great Nation which still need our help. They
are the engine of our economy. And with that, Mr. Speaker, I yield
back.
Chairman KIM. Thank you. Appreciate it.
I want to turn it over to Congressman Spano. You are now recog-
nized for 5 minutes.
Mr. SPANO. Thank you, Chairman Kim and Ranking Member
Hern for hosting the hearing today. I want to thank each of you
for testifying about your experience with the PPP forgiveness proc-
ess.
As of August 20th, in my district alone, which is the 15th Dis-
trict of Florida, Central Florida, 10,254 businesses have received
$304 million in PPP loans saving tens of thousands in jobs. For
many, the program has been a lifesaver. I have actually talked
with so many of them since the launch of PPP. One, for instance,
Mr. Powell I can think of specifically, he owns a company called
Boulder Athleticwear in Plant City and they manufacture women’s
athleticwear. The program was a lifesaver for his business because
it was an easy application process that provided a quick capital in-
fusion to help make sure that he could retain his employees
through the retail closures. One of Mr. Powell’s biggest concerns as
he goes into the forgiveness process is that while the PPP funding
made a significant impact, the business has still not fully recovered
as is the case with the vast majority of businesses across the coun-
try. His biggest request has been for a second round of PPP fund-
ing to help him as the economic recovery continues.
My question is for Ms. Ozer. You mentioned that Fulton Bank
has approved nearly 11,000 PPP loans for a total of almost $2 bil-
lion and that you have already received the notices from many of
your PPP borrowers that have either closed their doors or filed for
bankruptcy. And so my question to you is out of those 11,000 semi
PPP loans that Fulton Bank has approved, do you have a specific
figure or do you have a sense, one or the other, for how many noti-
fications like this your institution has received? So how many of
these 11,000 businesses would you say at this point today have ei-
ther closed their doors or filed for bankruptcy?
Ms. OZER. I do not have the exact figures. Anecdotally I have
spoken to at least five different businesses that are planning to
close. However, there are borrowers out there that we do not know
about, and so I cannot put a figure on it. The problem is that with-
out being able to have any direction on what to do with these loans
if a borrower does go out of business or does declare bankruptcy,
we question how we collect the guarantee from the SBA because
there is no guidance on that.
Your question about the exact numbers, I do not know. I mean,
we have had chatrooms with lenders all across the country who
have been experiencing this that businesses are closing and some
of them are filing bankruptcy but there are also businesses that
are trying to sell and there is not enough guidance on what we
should do for them if they have a PPP loan and they want to sell
their business. They need to strike while the iron is hot. And they
are unable to sell their business because there is no guidance on
how we should do that if they do have a PPP loan.
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
19
So there are a lot of things that need to be fixed in this program
so that we can clearly help our borrowers.
Mr. SPANO. Thank you, Ms. Ozer. I appreciate that. And I think
your experience is consistent with my experience and many of the
lenders that I have spoken with, and certainly the small business
owners I have spoken with, some of whom have gone out of busi-
ness after literally decades of being open, some of them
generational businesses, that they spent literally decades building
and have put a lot of blood, sweat, and tears. So I would also en-
courage as Mr. Stauber just said a moment ago for leadership in
the House to put aside some of the partisan issues particularly as
we lead up to the election here, let’s put the interest of the Amer-
ican people, specifically our small businesses, let’s figure out what
we need to do to fix the problems that the lenders are having in
getting confirmation on what to do to get these loans forgiven. And
I think in large part this legislation would fix those issues. But
let’s hear the concerns and the cries really of small businesses who
are trying desperately to keep their businesses open.
And with that I yield the remainder of my time.
Chairman KIM. Thank you, Congressman, for yielding back.
I just have another question or two and just wanted to throw this
out there, and if anyone else has any or any other members have
any further questions, please let me know and we can do that, oth-
erwise, we can start to wrap up.
Ms. Bonfig, I want to kind of revisit something that you had
mentioned. As a borrower, you know, you were describing the com-
plexity of that situation, the complexity of the EZ Form and the
others and the time-consuming aspects of that. And I would like to
just see if you could give me a little bit more specificity about what
you are saying about the complexity even though the EZ Form and
how it does not actually give you that much more leeway than sort
of the EZ form. I just want to kind of hear this in your own words
from your experience.
Ms. BONFIG. Okay. I did the full long form. As soon as it came
out I started working on it and I created a spreadsheet to help me
through it because I had so many different sections, so many dates
and information that I needed to add in there and I could not just
use current staff. I have to go back and pull X staff, staff that was
no longer with me and find out their information. For the current
term, all the terms that were asked for in the long form. It was
exhausting. It was frustrating. There is no easy way to pull the in-
formation quickly.
So after having that done, I literally had just turned mine in and
the EZ form came out. So that was frustrating in itself but I start-
ed looking at the EZ form and the reality is you still have to do
almost all the work behind the scenes. They just changed the front
page a little bit. So you still have to go back and you have to fill
out the worksheet. You have to fill out Schedule A. Schedule A
gives you six or seven little lines to put your staff in. And I am not
wrong. When you have 30-plus staff, you have to create your own
spreadsheet. I mean, you have to, you know, you have to do what
you have to do to get the information together. But I wonder how
many people who put this information together actually step into
a business and try to actually apply for the forgiveness because I
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
20
think if they had there is a lot of this that is so confusing when
you read it. And I do not consider myself a dumb person. I do not
consider myself a genius either, but this should be easy enough for
me to understand the first time I read it. I should not have to go
back to it over and over and over again and go I do not understand
what that means. I do not understand what they are asking for
here. It is very, very confusing.
I do not know how to help some of the people I am trying to help
because if you read on the application, the full-time equivalent re-
duction safe harbor one. If you just take 15 seconds and read
through it, you know, okay, wait a second. I have got to go back
and read that again because that made no sense. And so, and
again, the owner-employee aspect of all of it, when that came
through that was very frustrating because I have a partner who
was not an owner last year but was an employee and now it said
that I can only use this much of 8 weeks of what she made last
year as an owner-employee. Well, she was not an owner so 8 weeks
of zero still equals zero.
In the same regard, I have a partner who was not an employee
last year but is now both an employee-owner. He made zero last
year. Zero times 8 weeks is still zero. So now I cannot count any
of their income. And there is nobody answering these questions.
I actually had our representative from the Small Business Devel-
opment Center email a member of the SBA and the response that
we got back was ‘‘work it out with your lender.’’ So Lynn, I am sure
that you are probably feeling those things, too. ‘‘Work it out with
your lender’’ is not an appropriate answer to come from the SBA
who is running the program.
Chairman KIM. Thank you, Ms. Bonfig. And thank you, all of
you, for just your honest challenges and assessments of what is
happening here.
Mr. Patel, my district has a lot of shore towns, a lot of tourism
aspects, a lot of hotels and hospitality that are struggling. Mr.
Parker is from my district. He knows how difficult things have
done throughout there, especially in our hometown there in
Bordentown, which is a small business town and, you know, folks
are trying to do everything they can to try to make that work.
Ms. Ozer, the way in which you have been talking through this
has been incredibly helpful, really just giving us some sense what
you are seeing because you are seeing across the board. You have
seen this on a macro level which is really just helping fill out some
of the conversations here that we have had.
Ms. Bonfig, you know, thank you again. As a father of a 3-year-
old and a 5-year-old, I know how tough it is for childcare centers
and you are trying to do everything that you can to try to do this
right, keep the kids safe, you know, keep our families safe. It is a
tough business even in normal times. So thank you for what you
are doing there. I really appreciate that.
For us, as Congress is weighing solutions for these small dollar
PPP borrowers seeking forgiveness, you know, we have to keep in
mind that simplicity will be key for most small businesses here.
The simple fact is that these firms that study the microbusinesses
do not have accountants or attorneys on staff as we have heard
today the challenges that many of you are facing and would there-
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
21
fore face additional and unnecessary barriers to accessing full loan
forgiveness.
SBA and Treasury have come together before to provide a some-
what abbreviated EZ forgiveness application, but as we just heard
today it is still not easy enough for the average small business
owner. There is still a lot more that we have to do. Agencies should
come together once again and provide a streamlined loan forgive-
ness application for small dollar borrowers who represent the vast
majority of all PPP borrowers. If the agencies insist on the status
quo, I am sure the members of Congress on this Committee will
work together in a bipartisan way as we have so often in the past
to craft a solution to these problems.
I ask unanimous consent that members have 5 legislative days
to submit statements and supporting material for the record.
And without objection, so ordered.
And if there is no further business before the Committee, we are
adjourned. Thank you so much for participating today.
[Whereupon, at 10:39 a.m., the subcommittee was adjourned.]
[Mr. Jim Parker did not submit his Responses to QFR’s in a
timely manner.]
[Mr. Pete Patel did not submit his Responses to QFR’s in a time-
ly manner.]
SBD026 with DISTILLER
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 F:\DOCS\41469.TXT DEBBIE
22
APPENDIX
SBD026 with DISTILLER Insert offset folio 22 here 41469.001
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00026 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
23
SBD026 with DISTILLER Insert offset folio 23 here 41469.002
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00027 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
24
SBD026 with DISTILLER Insert offset folio 24 here 41469.003
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00028 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
25
SBD026 with DISTILLER Insert offset folio 25 here 41469.004
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00029 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
26
SBD026 with DISTILLER Insert offset folio 26 here 41469.005
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00030 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
27
SBD026 with DISTILLER Insert offset folio 27 here 41469.006
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00031 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
28
SBD026 with DISTILLER Insert offset folio 28 here 41469.007
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00032 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
29
SBD026 with DISTILLER Insert offset folio 29 here 41469.008
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00033 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
30
SBD026 with DISTILLER Insert offset folio 30 here 41469.009
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00034 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
31
SBD026 with DISTILLER Insert offset folio 31 here 41469.010
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00035 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
32
SBD026 with DISTILLER Insert offset folio 32 here 41469.011
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00036 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
33
SBD026 with DISTILLER Insert offset folio 33 here 41469.012
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00037 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
34
SBD026 with DISTILLER Insert offset folio 34 here 41469.013
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00038 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
35
SBD026 with DISTILLER Insert offset folio 35 here 41469.014
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00039 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
36
SBD026 with DISTILLER Insert offset folio 36 here 41469.015
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00040 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
37
SBD026 with DISTILLER Insert offset folio 37 here 41469.016
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00041 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
38
SBD026 with DISTILLER Insert offset folio 38 here 41469.017
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00042 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
39
SBD026 with DISTILLER Insert offset folio 39 here 41469.018
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00043 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
40
SBD026 with DISTILLER Insert offset folio 40 here 41469.019
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00044 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
41
SBD026 with DISTILLER Insert offset folio 41 here 41469.020
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00045 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
42
SBD026 with DISTILLER Insert offset folio 42 here 41469.021
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00046 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
43
SBD026 with DISTILLER Insert offset folio 43 here 41469.022
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00047 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
44
SBD026 with DISTILLER Insert offset folio 44 here 41469.023
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00048 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
45
SBD026 with DISTILLER Insert offset folio 45 here 41469.024
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00049 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
46
SBD026 with DISTILLER Insert offset folio 46 here 41469.025
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00050 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
47
SBD026 with DISTILLER Insert offset folio 47 here 41469.026
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00051 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
48
SBD026 with DISTILLER Insert offset folio 48 here 41469.027
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00052 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
49
SBD026 with DISTILLER Insert offset folio 49 here 41469.028
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00053 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
50
SBD026 with DISTILLER Insert offset folio 50 here 41469.029
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00054 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
51
SBD026 with DISTILLER Insert offset folio 51 here 41469.030
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00055 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
52
SBD026 with DISTILLER Insert offset folio 52 here 41469.031
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00056 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
53
SBD026 with DISTILLER Insert offset folio 53 here 41469.032
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00057 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
54
SBD026 with DISTILLER Insert offset folio 54 here 41469.033
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00058 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
55
SBD026 with DISTILLER Insert offset folio 55 here 41469.034
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00059 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
56
SBD026 with DISTILLER Insert offset folio 56 here 41469.035
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00060 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
57
SBD026 with DISTILLER Insert offset folio 57 here 41469.036
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00061 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
58
SBD026 with DISTILLER Insert offset folio 58 here 41469.037
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00062 Fmt 6602 Sfmt 6602 F:\DOCS\41469.TXT DEBBIE
59
Æ
SBD026 with DISTILLER Insert offset folio 59 here 41469.038
VerDate Mar 15 2010 14:27 Jun 08, 2021 Jkt 000000 PO 00000 Frm 00063 Fmt 6602 Sfmt 6011 F:\DOCS\41469.TXT DEBBIE
File and source
- File
- CHRG-116hhrg41469.pdf
- Size
- 12,383,250 bytes
- SHA-256
- e6fa61a9842e5829b5fc418bb3e50a7b15db158e62bcd0cf61871a5c44af825e
- Our copy
- CHRG-116hhrg41469.pdf
- Original
- www.govinfo.gov