Paycheck Protection Program: An Examination of Loan Forgiveness, SBA Legacy Systems, and Inaccurate Data — GovInfo PDF CHRG-116hhrg41468

Summary

A hearing record, Small Business Committee Document Number 116–094, titled Paycheck Protection Program: An Examination of Loan Forgiveness, SBA Legacy Systems, and Inaccurate Data, before the Subcommittee on Innovation and Workforce Development of the Committee on Small Business, September 24, 2020. The listed witness is Mr. William Manger, Small Business Administration Chief of Staff and Associate Administrator, Office of Capital Access. In the opening statement, Chairman Crow says the portal went offline for 4 hours on launch day, and that a July 27 letter to Administrator Carranza about data SBA released on July 6 came from Crow and 28 other Members of Congress. Ranking Member Troy Balderson also gives an opening statement.

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Issuer: Congressional materials
Document type: Congressional Hearing
Case: Chrg 116Hhrg41468

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“Paycheck Protection Program: An Examination of Loan Forgiveness, SBA Legacy Systems, and Inaccurate Data — GovInfo PDF CHRG-116hhrg41468.” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-116hhrg41468/, SHA-256 3b6959a11f95de2e451a582947f3ba817f6977b7eb337824797555d5e16747ff.

Full text

PAYCHECK PROTECTION PROGRAM: AN
EXAMINATION OF LOAN FORGIVENESS, SBA
LEGACY SYSTEMS, AND INACCURATE DATA

HEARING
BEFORE THE

SUBCOMMITTEE ON INNOVATION AND
WORKFORCE DEVELOPMENT
OF THE

COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION

HEARING HELD
SEPTEMBER 24, 2020

Small Business Committee Document Number 116–094
Available via the GPO Website: www.govinfo.gov

U.S. GOVERNMENT PUBLISHING OFFICE
41–468 WASHINGTON : 2021

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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)

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CONTENTS
OPENING STATEMENTS
Page
Hon. Jason Crow ...................................................................................................... 1
Hon. Troy Balderson ................................................................................................ 3

WITNESS
Mr. William Manger, Small Business Administration Chief of Staff, Associate
Administrator, Office of Capital Access, Small Business Administration,
Washington, DC ................................................................................................... 4

APPENDIX
Prepared Statement:
Mr. William Manger, Small Business Administration Chief of Staff, Asso-
ciate Administrator, Office of Capital Access, Small Business Adminis-
tration, Washington, DC .............................................................................. 22
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.

(III)

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PAYCHECK PROTECTION PROGRAM: AN
EXAMINATION OF LOAN FORGIVENESS, SBA
LEGACY SYSTEMS, AND INACCURATE DATA

THURSDAY, SEPTEMBER 24, 2020

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
SUBCOMMITTEE ON INNOVATION AND WORKFORCE
DEVELOPMENT,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:03 a.m., in Room
2360, Rayburn House Office Building, Hon. Jason Crow [chairman
of the Subcommittee] presiding.
Present: Representatives Crow, Finkenauer, Kim, Davids,
Houlahan, Chabot, Balderson, Hern, Burchett, and Joyce.
Chairman CROW. Good morning. I call this hearing to order. I
want to thank everyone for joining us this afternoon for this official
hybrid hearing.
I want to make sure to note some important requirements. Let
me begin by saying that standing House and Committee rules and
practice will continue to apply during hybrid proceedings. All mem-
bers are reminded that they are expected to adhere to these stand-
ing rules, including decorum.
During the covered period, as designated by the Speaker, the
Committee will operate in accordance with H. Res. 965 and the
subsequent guidance from the Rules Committee in a manner that
respects the rights of all members to participate.
House regulations require members to be visible through a video
connection throughout the proceeding, so please keep your cameras
on. Also, please remember to remain muted until you are recog-
nized, 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 timeslot, 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.
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I am pleased to be holding this hearing today to discuss the tech-
nical aspects of the Small Business Administration’s Paycheck Pro-
tection Program and to learn more about the new forgiveness por-
tal.
I would like to thank Mr. William Manger—am I pronouncing
that right, Mr. Manger?—who serves as SBA’s Chief of Staff as
well as the Associate Administrator for the Office of Capital Access
for joining us here today.
Let me begin by saying that the Committee recognizes that the
SBA had to launch the Paycheck Protection Program quickly and
disburse funds to small businesses that were in jeopardy of closing,
due to the coronavirus pandemic. But I am concerned that in the
rush to roll out the program, some important technical controls
with the PPP portal were overlooked.
The system used for PPP was quickly overwhelmed by an un-
precedented number of applications. The day the portal was
launched, it went offline for 4 hours, in which lenders could not
submit borrowers’ applications. During the relaunch of the portal
for the second round of PPP funding, it crashed again.
I am concerned that SBA is relying on an outdated system to
process PPP loans. Back in 2014, the Government Accountability
Office notified the SBA that E-Tran, the electronic loan processing
system used to process PPP applications, may not be able to handle
a large influx of loan applications. Now, 6 years later, SBA is still
relying on the E-Tran system. And I have to wonder if these issues
could have been prevented if SBA heeded the warning of our gov-
ernment’s watchdog.
Today I would like to learn more about what Congress can do to
support SBA’s modernization efforts of the loan processing systems.
I am also concerned that the SBA system lacks critical internal
controls to ensure data accuracy.
On July 27, I, along with 28 other Members of Congress, sent a
letter to Administrator Carranza, detailing issues with the data
SBA released on July 6. According to one report in The Washington
Post, an analysis on 4.9 million loans indicated that many compa-
nies retained far more workers than they employ. Another report
by the Post estimated that at least 226,000 small business loans
were credited to the wrong congressional district.
Our letter asked the SBA to clarify several data categories, such
as how the jobs retained figure was calculated, how loans were at-
tributed to congressional districts and the measures taken to en-
sure future reports contain accurate data. Sadly, we never received
a response.
Turning now to loan forgiveness, I would like to know what steps
SBA is taking to ensure that the technology issues encountered
during the PPP loan application period do not occur during the for-
giveness period. But, most importantly, I would like to know what
SBA plans to do to make the loan forgiveness process easier.
Small business owners are incredibly resilient and they are used
to overcoming challenges, but the coronavirus has been a crushing
blow. And while the PPP has helped them retain key employees
and make rent and other payments, many are anxious that their
loans won’t be fully forgiven and they will be saddled with more
debt.

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And the forgiveness forms do little to alleviate those concerns.
They are complex, confusing, and time-consuming. Small busi-
nesses do not have the time or resources, in the midst of a pan-
demic, to spend hours on end trying to fill out these forms. They
are fighting for their survival.
With that said, I look forward to hearing about these important
issues.
I now yield to the Ranking Member, Troy Balderson, for his
opening statement.
Mr. BALDERSON. Thank you, Mr. Chairman.
And thank you to Mr. Manger for coming before us today to dis-
cuss how your office has handled the past 6 months.
The early days of this year marked an American economy that
was performing at historic highs. However, news started to emerge
from China on a health concern that was identified as a new
coronavirus. On March 13, President Trump declared a national
emergency, and soon afterward States and localities began civil au-
thority shutdowns of businesses to safeguard the health of citizens.
Congress responded quickly. To prepare for the fast-moving cri-
sis, our entire Federal Government quickly worked together, in a
bipartisan manner, to enact numerous pieces of legislation to en-
able the SBA to respond to the needs of America’s small business.
These new tools that came from the legislation, such as the
Coronavirus Preparedness and Response Supplemental Appropria-
tions Act, the Families First Coronavirus Response Act, and the
Coronavirus Aid, Relief, and Economic Security Act, or CARES.
As we all know, the CARES Act initiated the landmark Paycheck
Protection Program, or PPP, that provided small businesses par-
tially forgivable low-interest loans to keep their employees on the
payroll during the pandemic.
Although the implementation of the program at the agency level,
both at the SBA and at the Department of Treasury, has initiated
uneven with changing enrolling guidance, the PPP has been a pop-
ular assistance program for small businesses across the country.
The program has provided billions of dollars to our Nation’s
smallest firms. Unfortunately, due to a lack of consensus, the pro-
gram lapsed on August 8, with more than $135 billion still avail-
able.
The Ranking Member of our full Committee, Mr. Chabot, has in-
troduced a new piece of legislation, H.R. 8265, that would extend
the program through the end of the year. I am a cosponsor of this
bill and was disappointed to see it fail in a procedural vote on the
House floor yesterday in a party-line vote. I, for one, will continue
to work with anyone who wants to work with me to reopen this
lifeline for America’s smallest firms.
The topic of today’s hearing is of critical importance, as we have
the chance to hear from the SBA about how their systems dealt
with the stress of overseeing over 5.2 million PPP loans over 4
months. Specifically, I am most interested in hearing about how
the SBA has implemented the PPP forgiveness process in order to
reduce the regulatory burden on small firms.
Mr. Manger, again, thank you for being here with us, and I look
forward to hearing your testimony and participating in the ensuing
discussion.

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Mr. Chairman, I yield back.
Chairman CROW. Thank you, Mr. Balderson.
If Committee members have an opening statement prepared, we
would ask that they be submitted for the record.
I would like to just take a minute to explain the timing rules.
Each witness gets 5 minutes to testify and each member gets 5
minutes for questioning. There is a lighting system to assist you.
The green light will be on when you begin, and the yellow light
comes on when you have 1 minute remaining. The red light comes
on when you are out of time, and we ask that you stay within the
timeframe to the best of your ability.
I would like to now introduce our witness, Mr. Manger. Mr. Man-
ger currently serves as the Small Business Administration’s Chief
of Staff as well as the Associate Administrator for the Office of
Capital Access.
Prior to his SBA appointment, Mr. Manger served as managing
director at Brock Capital Group, where he advised and supported
small- to medium-size enterprises in their efforts to raise capital
and expand their business. Before investment banking, he was the
associate administrator for field operations at the SBA.
Mr. Manger, we welcome you to the Committee, and you are rec-
ognized for 5 minutes.
STATEMENT OF WILLIAM MANGER, SMALL BUSINESS ADMIN-
ISTRATION CHIEF OF STAFF, ASSOCIATE ADMINISTRATOR,
OFFICE OF CAPITAL ACCESS, SMALL BUSINESS ADMINIS-
TRATION, WASHINGTON, DC
Mr. MANGER. Thank you, Chairman Crow, Ranking Member
Balderson, and the members of the Subcommittee. And I also want
to recognize the Ranking Member of the full Committee, Congress-
man Chabot.
I appreciate the opportunity to appear before you today and to
discuss the Paycheck Protection Program. First, let me acknowl-
edge the SBA staff and my colleagues in the Office of Capital Ac-
cess for their tireless work over the last 6 months.
SBA was charged with creating and implementing an unprece-
dented economic relief program at a critical and uncertain time in
our Nation’s economy. Working with Treasury, we wrote program
rules and launched the PPP within 6 days of passage of the CARES
Act.
Since then, the program has reached over 5.2 million small busi-
nesses with over $525 billion in needed economic aid. I am very
proud of the work of the SBA staff. This achievement was also
made possible through a network of almost 5,500 lenders. To put
that in context, our SBA business loan programs have annually
around 1,800 active lenders.
In the 4 months that the PPP was receiving loans, 3,700 new
lenders were added. Behind that was a great deal of effort to en-
able lender access to our E-Tran system. Our OCA team helped
provide system accounts for 73,000 new users and handled over 3.7
million system actions for all lenders.
During the PPP rollout, to match the number of lenders and the
anticipated loan volume, SBA made several significant investments
in our E-Tran system. Working very closely with our CIO, we

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added servers, memory, and capacity at various stages in PPP
lending.
In referencing E-Tran, let me also clear up some false impres-
sions of the system. At no time did the PPP—at no time during the
PPP did the system fail or crash. E-Tran is a stable system and
fully supported by the agency.
Turning next to the PPP data disclosure, the agency has been
transparent with data throughout the program. SBA released daily
lending figures to Congress and the public. We provided weekly de-
tailed program overviews as well as two comprehensive data disclo-
sures of all PPP loans.
In comparing this to our 7(a) program, SBA posts lending data
following each fiscal quarter for a loan volume in the tens of thou-
sands. With PPP, in that same timeframe, we disclosed loan data
for millions of loans.
With three times the number of lenders and 260 times the num-
ber of loans, there were some inequities in the first release of the
data. In response, SBA created a process for lenders and borrowers
to correct information that they had inputted into the system. We
also adjusted how the system designated ZIP code locations within
congressional districts. This data will be further refined through
the collection of information during the loan forgiveness process.
To receive loan forgiveness, borrowers are responsible for submit-
ting a loan forgiveness application and the required supporting doc-
umentation to their lender. Lenders are then responsible for re-
viewing the documentation and issuing a decision to SBA within 60
days of receiving the application.
Within 90 days of the lender decision and submission to SBA and
subject to any SBA review of the loan or the loan application, SBA
will remit the appropriate forgiveness amount to the lender, plus
any interest accrued through the date of payment.
SBA opened the forgiveness portal on August 10. We released
three rules and detailed FAQ documents on the process. We estab-
lished a hotline for lender inquiries and conducted a stakeholder
call with over 10,000 participants at one time. We also increased
our staffing, with over 1,100 personnel to help manage loan forgive-
ness and reviews.
Our Capital Access staff spent a great deal of time preparing
PPP lenders; and while 98 percent of lenders are signed up for the
forgiveness, we so far have only received approximately 2 percent
of the applications. While the low number might be attributed to
the potential for further changes by Congress, SBA has been and
remains open and ready for business.
Thank you again, Chairman Crow and Ranking Member
Balderson, for inviting me to testify. I look forward to any ques-
tions you may have.
Chairman CROW. Thank you, Mr. Manger.
I will begin by recognizing myself for 5 minutes.
Mr. Manger, we sent this letter, me, along with 28 other Mem-
bers, sent the letter to the SBA on July 27th. Why haven’t we re-
ceived a response to that letter?
Mr. MANGER. You know, I would have to look into exactly
that—I am not familiar with the specific letter—I am not familiar
with the specific letter you are referencing. I will have to look into

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that and get back to you. We certainly have always tried to be as
responsive as possible to any inquiries from Congress or from any
other parties.
Chairman CROW. Will you commit to me today that you will get
us a response on that letter?
Mr. MANGER. Yes, I will.
Chairman CROW. Okay, thank you.
I would just like to follow up on one item that you mentioned.
And I was confused about the E-Tran comment, that you said at
no time has it failed or crashed, yet it wasn’t available, right? It
went offline to lenders for periods of time during the peak periods.
Can you explain to me or just clarify for me, when you say it
didn’t fail or crash, why wasn’t it available? Was there something
else going on there?
Mr. MANGER. Honestly, sir, it was available at all times. There
were periods where it did slow down, but at no time did it abso-
lutely cease. There was a period, April 10 into the morning of April
12, where we put out a notice that we would be taking the system
down for some upgrades that I have referenced in my opening
statement. And so that was a planned takedown of the system so
we could add—we went from actually five servers to eight servers.
We made significant increases to the technology in the E-Tran sys-
tem during the rollout of the PPP program. So——
But, to be clear, at no time did the program crash. You know,
a crash would be related to losing data or corruption in the system.
That simply did not occur, sir.
Chairman CROW. Okay. I think this is an area—I am not a tech-
nical expert so I, you know, can’t explain the differences between
those things, but I think this is an area for us to flesh out a little
bit more, because I have received a lot of reports from business
owners in my district of them in the queue filling out their applica-
tion and then the system just going down and losing data and
things of that nature.
So there is a disjoint here that I think would be worth for us to
follow up on and kind of square those reports that, you know, many
of us heard from our communities with what you were seeing at
the SBA. So we will follow up with you on that front as well.
Mr. MANGER. Sure.
Chairman CROW. So, Mr. Manger, the second question or third
question I have is: Borrowers started reaching out to lenders in
June to start the forgiveness process. Why did it take the SBA so
long to put together a comprehensive forgiveness program for PPP?
Mr. MANGER. Well, sir, we wanted to make sure that we were
weighing the responsibility, the fiscal responsibility that the SBA
has when we are talking about $525 billion, to make sure that
those businesses are, indeed, eligible and that, indeed, the amount
that we are paying out to the lender for the forgiveness is the accu-
rate amount.
So we had to go through quite a lot of review, and we did this
in consultation with Treasury, to make sure that we took every-
thing into consideration that should be addressed, to ensure that
when we do pay out the forgiveness to the lenders, it is the proper
amount.

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Chairman CROW. Okay. And I certainly appreciate that fiscal
prudence. One of the tensions that existed here, however, was a lot
of these small businesses were literally—many of them are literally
applying for this program and taking the risk, not even knowing
what the criteria were going to be and whether they would be eligi-
ble for it, but, you know, thinking that there was a risk they would
have to assume that debt in advance, and that is a risk they took
on.
So, given that, do you believe that there should be a threshold
or criteria established where loans should be forgiven automati-
cally?
Mr. MANGER. Sir, I know that there is some legislation that is
up here on the Hill that addresses that. I would say that is for
Congress to decide upon. We certainly stand ready to enact any-
thing that you all put forward. But at this point in time, again, we
wanted to make sure that we weighed our fiscal responsibility to
the taxpayer with, again, integrity of the program. And so we have
developed, you know, the forgiveness platform that we have to en-
sure that.
Chairman CROW. And I will push back a little bit on that, be-
cause we left it to you all to develop the criteria for forgiveness. So
I am asking you, you know, in your opinion as one of the top SBA
administrators, you know, running the program, do you believe,
which we have seen now and given the uncertainty that many of
those businesses had when they were applying for the program,
that for ease of use and for predictability that we should establish
criteria for automatic forgiveness?
Mr. MANGER. Yeah. Sir, I will echo what Secretary Mnuchin
said 2 days ago when he was asked a similar question. I mean,
again, we put together a platform that we think has integrity and
maintains, again, the taxpayer’s—our fiscal responsibility to the
taxpayer. We believe that we do not have the authority to all of a
sudden deem a certain threshold where there would be a cutoff and
that all those loans could be forgiven automatically.
So, again, we believe that Congress has to act to come up with
a threshold if you would like us to do that.
Chairman CROW. Okay.
Mr. Balderson, you are recognized for 5 minutes.
Mr. BALDERSON. Thank you, Mr. Chairman.
My first question, Mr. Manger, is, as you know, the SBA and
Treasury guidance has remained critical for small businesses and
lenders participating in PPP. Given that many small businesses
are in the middle of the loan forgiveness process and given that we
continue to hear that the process remains complex, does the SBA
anticipate updating and providing new loan forgiveness guidance or
FAQs on this matter?
Mr. MANGER. Yes. You know, we provided, as I said in my
opening statement, quite a lot of information in IFRs and actually
30 FAQs that pertain to forgiveness. We have developed two forms,
the 3508 and the 3508EZ, for those businesses to use something of
a similar but a simpler form for applying for forgiveness.
We have, as I said, conducted lender outreach to over 10,000 peo-
ple on one call in the last couple of weeks alone. And we will con-
tinue to do that, and we will continue to offer as much guidance

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as possible to make it as easy as possible for borrowers and lenders
to go through the forgiveness process.
Mr. BALDERSON. Okay. Thank you for that answer.
And my next question was regarding the E-Tran system, and I
also had a question about that, but Mr. Chairman has addressed
that issue.
So I will go with, as the head of the Office of Capital Access and
Chief of the Staff on the SBA, what do you believe are the biggest
challenges when it comes to the PPP loan forgiveness for a small
business, for a lender, and for the SBA?
Mr. MANGER. That is a very good question, sir. Obviously, we
need to make sure that what is being asked for is legitimate. We
want to make sure that that small business that has come in for
that loan is, in fact, an eligible small business, given the param-
eters and guidance of the program.
So, again, we want to make sure that, you know, the borrower
provides the information that they need to provide to the lender.
It is then the lender that makes the decision on if the forgiveness
should be what is asked for, possibly higher, possibly lower, but it
is up to the lender to do that.
And then the lender submits that application after 60 days or
within 60 days to the SBA, and the SBA then has 90 days to re-
view what has been submitted to us. And, again, we will make the
decision as to what is the proper forgiveness amount and then pay
that out to the lender.
So it is a process that each party has to be involved with to make
sure that they are submitting the correct data so that we can verify
what is going to actually be paid out, based on, again, the small
business retaining their employees at the level they had prior to
the pandemic as well as any eligible, you know, interest, mortgage
payments, or utilities.
Mr. BALDERSON. Okay. From your perspective, what should
Congress concentrate on as we seek to reopen and improve this
process?
Mr. MANGER. Well, again, I know that Chairman Chabot has
language that is floating around Capitol Hill, and certainly I think
there are some very good thoughts in there. And we would wel-
come, again, Congress helping to simplify the program even further
if they so choose, and then we would certainly enact that as quickly
as possible.
I mean, when you gave us the CARES program and the PPP and
specifically back in March, we really stood this program up in 6
days, which is really quite incredible, the fact that then this pro-
gram was able to make $525 billion available to U.S. small busi-
nesses and not-for-profits.
Mr. BALDERSON. Thank you very much.
Mr. Chairman, I yield back. Thank you.
Chairman CROW. The gentleman yields back.
I would now like to recognize the gentlelady from Pennsylvania,
Ms. Houlahan, for 5 minutes.
Ms. HOULAHAN. Thank you, Mr. Chair, and thank you very
much for your testimony today.
I want to kind of continue along the lines that Chairman Crow
was asking you about, about the forgiveness that has been ongoing

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thus far. I had the opportunity to talk to a lot of the lenders in my
community yesterday, who are really struggling right now because
they are trying to get things through the pipeline in forgiveness,
but are receiving a lot of error messages that a lot of the data is
wrong, that they are ending up with a very, very small percent of
what they submit being accepted the first time around.
And they are really struggling with the technology, to be honest,
of how to reconcile what they have on file and dates and those kind
of things with what you are requiring them to do. So let’s put that
over here.
They also are anticipating from Congress that we might do some-
thing in the forgiveness area. And so in many cases, they are coun-
selling, and the CPAs are counselling, the borrowers to just hold
on and wait.
So we are creating this perfect storm where people can’t get
through a pipeline right now at all. They are being kind of coached
and counseled to wait a little bit. And we are creating a demand
signal or a backlog possibly that will create this tsunami, so to
speak, of problems when and if we are able to create some sort of
forgiveness program.
I worry, because when we started the program, there was all
kinds of technical issues and all kinds of glitches in the system.
How are you preventing that from happening again when and if we
are able to come to agreement on forgiveness?
Mr. MANGER. No. Thank you very much, Congresswoman. Let
me just explain to you that the platform that we are using for the
forgiveness portion of the PPP program was actually a software as
a service that the agency has purchased specifically for this pur-
pose of forgiveness. So it is not actually the E-Tran system that
will be doing the forgiveness process.
We actually were able to retain an excellent, again, software as
a service platform, a COTS platform, that we, you know, looked at,
and it has been used by many lenders in this country as the for-
giveness platform that they use.
And so we have adopted that and worked very diligently with
that team from that contractor to, again, modify what they had for
our program. And it is a cloud-based program, so there are no ca-
pacity issues.
Certainly, I am now hearing from you that there are some prob-
lems of inputting some information. I will go back and take a look
at that, talk to the contractor about what may be happening there.
But the system is a robust system that, again, as I said, has been
used by many banks here in the country, and we have brought that
on as a software as a service platform specifically for the forgive-
ness process.
Ms. HOULAHAN. So I would like to provide you with some of
that data, because from very small lenders to very large lenders,
they all had experienced in my community the same problems in
trying to push through forgiveness applications for right now in
this very moment.
And I just wanted to make sure I reiterated a question, with
making sure that you felt as though you had enough resources for
oversight and fraud detection, especially if there is a streamlined
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Do you feel as though you have a good enough process to protect
and prevent against fraud?
Mr. MANGER. Yeah. Let me just tell you a little bit about what
we have done in our process here. We have brought on actually
several contractors to help us. We have developed an automated
tool that all loans will be run through. That verifies data that is
publicly available through LexisNexis. That is the first stage.
Then, when we see how the loan is doing after that, it will come
to folks for manual review. I mentioned that we have brought on
a total of 1,100 new folks to help do the manual reviews of the
loans, and that is using contractors as well as SBA staff.
So we have developed a very robust platform. We are using,
again, several contractors. In fact, we even have another contractor
that we brought on who is very well-known who will be doing qual-
ity assurance of the whole platform and seeing that from, you
know, a 60,000-foot level, to make sure that what we are doing is,
in fact, significant and appropriate.
But we have layers that we have put into place to make sure
that we will properly review these loans, properly provide the cap-
ital for the forgiveness.
And so I think we have a very robust system that we have devel-
oped, again, working with top contractors as well as SBA staff to
have that fully developed.
Ms. HOULAHAN. Thank you. I will yield back, but I do look for-
ward to connecting with you to give you some very specific exam-
ples of the issues that we are struggling with. So thank you.
I yield back, Mr. Chair.
Mr. MANGER. Thank you.
Chairman CROW. The gentlelady yields back.
I would now like to recognize the gentleman from Tennessee, Mr.
Burchett, for 5 minutes.
Mr. BURCHETT. Thank you, Mr. Chairman, I appreciate it. And
I want to make sure. How do you pronounce your name? Is it Man-
ger?
Mr. MANGER. Manger, yes.
Mr. BURCHETT. Manger. All right, cool. Thank you for being
here, brother. Can you describe, you know, those reports that you
all are receiving in more detail, and how many of those have you
received thus far?
Mr. MANGER. I am sorry, Congressman. Which reports are you
referring to?
Mr. BURCHETT. The loan reports. Well, in your testimony you
said: ‘‘Regardless of their value, SBA is reviewing loans when it re-
ceives reports that specific loans or borrowers do not meet program
requirements or otherwise may be ineligible.’’
Mr. MANGER. Oh, yes. We have received quite a few reports.
And if you add up all the loans that then have been, you know,
identified as having some indicia of a problem with program com-
pliance, you know, it is in the, you know, tens of thousands of
loans.
But we are obviously tracking that, and that not a static number.
It is a dynamic number. Certainly, as we are made aware of any,
again, reports of issues with certain loans, we then look into that
and we make sure that we are addressing that.

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Mr. BURCHETT. Okay. We have heard from several small busi-
nesses and lenders that the PPP loan forgiveness process remains
complicated. And I know we are all trying to make improvements,
but what changes would you recommend to Congress as it pertains
to PPP loan forgiveness?
Mr. MANGER. Well, again, sir, you know, we have tried to make
the process as simple as possible, again, weighing our fiscal respon-
sibility and duty to the taxpayer to make sure that any time we
are paying out funds for forgiveness, they are legitimate, accurate
funds and that the program has integrity.
So that is what we have been doing.
Mr. BURCHETT. I appreciate that, but what I would just like to
know is, what would you recommend we do to make it better?
Mr. MANGER. Well, again, you know, I know Congressman
Chabot has some language that says that, you know, on his bill,
talking about having a threshold below which the review process
would really be just basically a certification on the part of the
small business. Certainly, we would be willing to take a look at
that, and if that becomes law, that is what we will implement right
away.
Mr. BURCHETT. Well, just pretend it is just me and you talking
in an off-the-record conversation brother. I don’t need all this
Washington talk. I just want to know what the heck we can do to
make it better. And I think you have expressed that, but you really
haven’t.
Mr. MANGER. No, I understand, Congressman. Again, we just
want to make sure that whatever we do, we are being, obviously,
responsible to the taxpayer. These are taxpayer dollars that we will
be paying out to these lenders for the borrowers, and we want to
make sure that it is done with integrity and legitimacy.
But we will do, again, whatever we can to make it as easy and
simple as possible.
Mr. BURCHETT. I dig all that. But what I am worried about is
we get 6 months out and we have really messed it up, because you
all are afraid to tell us, because some powerful lawmaker has tried
to put something on the books that looks good, but we, being neo-
phytes, that we wouldn’t understand what the heck we were doing
and we just created a problem that the grifters and everybody else
can advance their cause on.
And I would appreciate letting us know, as we say in east Ten-
nessee, closing the barn door before the cows got out.
Mr. MANGER. Congressman, I look forward to working very,
very closely with you.
Mr. BURCHETT. All right. You are very polished, sir. I appre-
ciate that. You ought to be on TV or something, I don’t know.
Well, tell me about the partnership you all have—and just
dadgum, just tell me about the partnership, I don’t need the pol-
ished answer, all right?—with the Department of Treasury that
you all developed over the—you know, within this working rela-
tionship. How will that help in the forgiveness process?
Mr. MANGER. Well, we have worked very closely since inception
of the program with Treasury to ensure that it was developed prop-
erly and with as many safeguards as possible. And so we have de-
veloped an excellent working relationship with Treasury. We

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speak, you know, several times a day, in fact. And that has worked
very well.
They have given us suggestions for the forgiveness. We have
worked with them and made our own suggestions. And I think we
have actually come up with a very good process.
We probably need to do a little more education on the side of
educating the borrowers and the lenders to make sure they know
exactly how to go about seeking the forgiveness.
Mr. BURCHETT. Can you do that in a noncomplicated manner?
Mr. MANGER. Sir, I pledge to you we will try and be as sim-
plified as possible to make sure that——
Mr. BURCHETT. I appreciate that.
Mr. MANGER.—everybody can take advantage of this in the
easiest way possible.
Mr. BURCHETT. Brother, next time I get in trouble with my
wife, I would appreciate you just giving me your cell phone num-
ber. I am just going to hand it over to you and you smooth that
road out for me, all right?
Mr. MANGER. Thank you, sir. I appreciate that.
Mr. BURCHETT. Thank you, brother.
And my wife watches these hearings and I haven’t done anything
to get myself in trouble with her. I just want you to know that.
Mr. MANGER. No. And I remember, Congressman, the first time
you introduced yourself, my name is Burchett, birch like the tree
and et like I just ate my breakfast. So anyway, I appreciate that.
Mr. BURCHETT. Thank you, brother.
Chairman CROW. Does the gentleman yield back?
Mr. BURCHETT. I do, Mr. Chair.
Chairman CROW. All right. Thank you, Mr. Burchett.
And notwithstanding your good faith efforts to try to get an an-
swer to our question, I appreciate you taking another cut at it.
And at some point, I would like Mr. Manger to actually help us
help you. That is the point of this question is to have a collabo-
rative relationship so that we can make better law and policy here
so you can implement it. But if you are not going to give us your
thoughts on how we improve the forgiveness process, it makes it
much harder for us to do that.
I would now like to recognize the gentlelady from Kansas, Ms.
Davids, for 5 minutes.
Ms. DAVIDS. Thank you, Mr. Chair. And thanks to you and to
Ranking Member Balderson for holding this important hearing
today.
The Paycheck Protection Program has certainly been a vital life-
line for so many businesses in the Kansas Third District during the
pandemic, and the possibility of loan forgiveness is certainly an im-
portant component of that.
We know that the pandemic is far from over, and that even as
our economy has started to reopen there are a lot of small busi-
nesses in Kansas that are still struggling to open their doors,
which is why——
Chairman CROW. Ms. Davids, we can’t hear you on the audio.
You might want to try—all right one moment while we work
through this with Ms. Davids. Ms. Davids, we couldn’t hear your
question. Your audio has cut out.

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Well, while we work out her audio, let’s move on to the next
member.
I would now like to recognize the gentleman from Pennsylvania,
Dr. Joyce, for 5 minutes.
Mr. JOYCE. Thank you, Chairman, and thank you, Ranking
Member Balderson, for organizing this today.
Mr. Manger, thanks for joining us. I think this is very important,
and I actually think it is a very critical time. On behalf of my dis-
trict, I am going to offer thanks to you and your office for your hard
work to iron out what we all know were initial glitches in the E-
Tran system.
Since PPP opened, my home State of Pennsylvania has received
more than 170,000 loans, which brought in more than $20 billion
for hardworking small business owners, their employees, and par-
ticularly their families.
I recently visited Boyer’s Orchard in New Paris, which is Bedford
County, Pennsylvania, to purchase some of their incredible apples.
And while I was there, I met with the Boyer family, Penn State
alumni who used the PPP to make ends meet. In discussions with
them, they described the program as, quote, ‘‘a godsend.’’
However, we all recognize in this room that many small busi-
nesses are still struggling to stay afloat. And, as mentioned, there
is more than $130 billion remaining in the Paycheck Protection
Program that concluded, as you pointed out, in early August.
Our Ranking Member, Mr. Chabot, has introduced legislation to
reopen this much-needed PPP access and allow these desperately
needed funds to be expended and pursued for the small businesses
to once again be the backbone of our community, which we all
know they are.
Mr. Manger, my question is really simple. If Congress were to re-
authorize the Paycheck Protection Program, as I and my colleagues
are fighting tirelessly to do so, how quickly could SBA begin proc-
essing the new applications?
Mr. MANGER. Sir, it would be very simple. Since the program
and the platform has already been built, it would really be as easy
as just flipping a switch and turning E-Tran back on.
So it would be done probably within a matter of a day, quite hon-
estly. We would obviously—you know, as you said, the money has
been put aside, so it would be really very simple for the agency to
turn the electronic transmission system back on.
Mr. JOYCE. So by flipping that switch, which you so eloquently
state, and in one day allowing those resources to be available, how
quickly could the money get into the hands of the small businesses?
Mr. MANGER. Well, sir, that is, again, up to the lenders for
making the disbursement. We provide a loan number to the lender.
They are making the loans on a delegated basis on behalf of the
agency. So, again, the disbursements would happen as quickly as
the bank is able to get that money out the door. You know, a mat-
ter of days, probably.
Mr. JOYCE. And finally, do you feel that the extension of the
PPP is part of your job at SBA in getting us through this pan-
demic?
Mr. MANGER. Sir, I think the numbers speak for themselves,
the fact that we have been able to help over 5 million businesses

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and not-for-profits with, again, over $525 billion. And when you see
the number of lenders that joined with us to make the program
available to U.S. small businesses, I mean, they were doing their
patriotic duty, coming to the rescue and making sure that they
could get money to these small businesses.
And we want to completely support that. And if you authorize us
to reopen a platform, we will do that, as I said, very quickly. We
will flip that switch, and we will make sure that the money flows
again out to the small businesses.
Mr. JOYCE. Thank you for your concise answers, and I conclude
by encouraging all of my colleagues, bipartisan, to work together to
allow for an extension of the PPP. Thank you for being here today.
And I yield the remainder of my time.
Mr. MANGER. Thank you, sir.
Chairman CROW. Thank you. The gentleman yields.
We are going to go back to the gentlelady from Kansas, Ms. Da-
vids, and see if she has worked out the audio on her end. Ms. Da-
vids, are you on?
Ms. DAVIDS. Yes, Chairman. Can you hear me?
Chairman CROW. We can hear you. All right. The gentlelady has
5 minutes.
Ms. DAVIDS. Perfect. Thank you so much. And thank you, Mr.
Ranking Member Balderson, for holding this hearing today.
So I do want to get into the question that I wanted to ask, and
just in case we have any technical difficulties again. You know, the
Paycheck Protection Program has obviously been a vital lifeline for
so many businesses in the Kansas Third and across Kansas.
And I just want to get into the balance that we have been talking
about and hearing about when it comes to balancing accountability
with the need to make the process simple and effective and avail-
able for our smallest borrowers, who have the fewest financial ad-
ministrative resources.
So, Mr. Manger, can you talk to us about the Government Ac-
countability Office report that came out this week that cited a
much longer standard application time than the SBA had pre-
viously cited? It seems that there is a discrepancy there, and I
would welcome your explanation for the discrepancy for both the
standard form and the EZ form.
Mr. MANGER. Yeah. I have to admit that I have not seen the
GAO report that you are referring to specifically, but, again, we
made our best estimate as to what it would take, again, to com-
pletely fill out both the 3508 and the 3508EZ forms.
And, again, we had the first—the 3508 form was launched on
May 15, and then the EZ platform form was launched on June 17,
again. And we did that so that we could simplify the process, espe-
cially for sole proprietors, independent contractors and, you know,
self-employed.
So I think, again, the process has been simplified to a great ex-
tent and, again, to balance, again, the integrity of the program and
to ensure, you know, the fiscal responsibility to the taxpayer. And,
again, we did our best estimate of what that time would take to
properly fill out the form and complete that and make sure that
all of the necessary documents are available for review.

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And, again, the lender makes their decision and then it comes to
us for our decision. But, again, we tried to make it as simple as
possible, maintaining, again, integrity of the system, fiscal respon-
sibility to the taxpayer, and, again, our best estimate of what that
time would take to get that done.
Ms. DAVIDS. So can you talk to us a little bit about the—you
know, when we talk about the challenges or risks, and certainly
you have brought up the risks to the—you know, how we allocate
and use and make use of the taxpayer funds.
Can you talk to us a little bit about the risks that you are con-
cerned about through the further simplification of this process? Be-
cause that is something that you have brought up multiple times
during this conversation is the stewardship, you know, the fidu-
ciary responsibility you have to the taxpayer. Can you talk to us
about what risks you all are thinking about and trying to mitigate?
Mr. MANGER. Sure. Well, let me just go back and briefly de-
scribe how this program was structured. As you know, the bor-
rower came in and basically on a——
Ms. DAVIDS. I am sorry. You don’t have to re-explain the struc-
ture of the program. I have been in this hearing and paying very
close attention to how things are going. I am just more concerned
about which—if you could tell us the specific risks that you are try-
ing to mitigate.
Mr. MANGER. Well, again, I would like to just say, though, that,
again, the borrower was certifying to the information that was
being put into the application. The lender was not, you know, going
back and checking and verifying that information. The lender was
merely, on a delegated basis, as I said previously, making these
loans so that, again, we could get capital out to these small busi-
nesses that were in dire need.
So it is very different than our regular program. For that reason,
we need to make sure that we are—that the small business that
actually applied for the loan and received a loan is, in fact, eligible,
that there is not any indicia of any issues that could be revolving
around, again, the program requirements, that they have fulfilled
the program requirements as spelled out in the IFRs.
And, again, it is just the necessity to ensure that everything was
followed properly so that we can, in fact, provide the capital to the
lender when that forgiveness application is submitted to us.
Ms. DAVIDS. Thank you. And I see I am short on time here, so
my office will follow up with you about the discrepancy between the
GAO report. And I appreciate your testimony today.
And I yield back, Mr. Chairman.
Chairman CROW. The gentlelady yields back.
I would now like to recognize the gentleman from Oklahoma, Mr.
Hern, for 5 minutes.
Mr. HERN. Thank you, Mr. Chairman, Ranking Member
Balderson. It is great to be here. Mr. Manger, thanks for being
here again.
As a small business owner for over 35 years and the Ranking
Member of the Small Business Committee on Economic Growth,
Tax and Capital Access, I understand the need for businesses to ob-
tain the adequate funding to support their operations, especially
during these unprecedented times.

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One way in which we have been able to provide funding is
through the PPP. Through this program, the SBA worked quickly
to provide aid to businesses across the country, and I appreciate
your efforts in the speedy implementation. Remind us all the PPP
program saved approximately 51 million American jobs. We know
now that it may be even higher than that.
At the same time, our bankers across the country played a cru-
cial role in the PPP implementation, putting in countless hours to
provide local business owners with loans. Without the hard work
of our banking industry, the PPP would not have been a success,
as we have seen today, and I commend them for their efforts.
However, the urgency to roll out PPP also caused the SBA to
overlook certain obstacles for lenders, such as the outdated loan
processing system known as E-Tran. Unfortunately, this system
could not sustain the incredible influx of PPP loan applications and
which caused burdensome tech-related issues for our many lenders,
who were working overtime to help borrowers obtain funding.
As the founder of a small community bank, I understand how
these obstacles can impact lending productivity. This was a waste
of viable business hours, and we must do better to help our lenders
navigate the PPP-related portals.
Additionally, we need to provide more comprehensive guidance to
explain how certain processes work, especially with loan forgive-
ness for both borrowers and lenders. Right now, there is an ambi-
guity and a confusion surrounding loan forgiveness, which has
caused banks to advocate for automatic forgiveness for certain
thresholds in order to mitigate the lack of clarity about this proc-
ess.
I for one am concerned about automatic forgiveness without over-
sight. I think there is a responsibility that this committee and all
of us in Congress have to have oversight to make sure there is no
fraud. So we have to get this figured out sooner rather than later.
Currently, many lenders are left in the dark on how loan forgive-
ness will be rolled out, both on the technology side and the policy
side, which brings me to my first question.
When the PPP was first rolled out, New Interim Final Rules
were frequently posted on SBA’s website. This created confusion for
both borrowers and lenders, since rules were constantly changing.
Because of this, we advocated for SBA to release a comprehensive
guide—I am sorry. We advocated for you to do this on the PPP, to
create transparency and help individuals navigate the program.
So my question is: Does the SBA have any plans to provide a
comprehensive guide to help lenders navigate the loan forgiveness
program process, including the new online portal?
Mr. MANGER. Congressman, we can certainly take a look at
that. What we have done specifically related to forgiveness is we
released three IFRs and, again, detailed FAQs. I believe there were
30 in all that specifically addressed the loan forgiveness process.
And we did that because, again, they are frequently asked ques-
tions, so we wanted to try and capture what, again, the borrower
and the lender really needed to understand the forgiveness process.
So we have done that thus far, and we are obviously trying to
do more. And we can certainly take a look at, you know, a docu-
ment such as you have just expressed here.

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But at this point, again, we believe the IFRs and the FAQs and
the forms and our outreach that we have been conducting has been
very, very helpful. And, you know, certainly we can always do
more, but we can take a look at anything else you would like us
to.
Mr. HERN. Well, I think, in talking to many bankers certainly
across my district and the State, their concern is not knowing the
rules until after they are required to do something. As an example,
we relied heavily, almost exclusively on our community banks—cer-
tainly, they touch all of our small businesses across America—in
addition to our big lenders.
But what we also know is they had to use their own loan docu-
ments, which required at that time a 6-month deferral until the
first payment, which are coming due. And now they have a loan
forgiveness document that says it is not until 10 months after the
SBA gives guidance on forgiveness.
So they have to go back and touch all of their documents now
to either put an addendum, because if they don’t they are out of
compliance with the Office of the Comptroller of the Currency or
the other State and Federal regulators, which is creating a real
burden and a financial cost to them that there is no additional fees
for, or there are none.
And so this is important for the banks to be able to touch these
documents one time, so that we can alert our borrowers to if there
is going to be any forgiveness at all. But we need to do this as a
respect to the people that we put the burden on to go loan this
money to the individual businesses so that they could keep the 51
million Americans employed.
So, with that, Mr. Chairman, I yield back, and thank you so
much for having this hearing.
Chairman CROW. Thank you, Mr. Hern. I appreciate your ques-
tions. The gentleman yields back.
I am going to just do a second round. I don’t think there are
many members with additional questions, but I will start with my-
self, and if others have questions we will go to those.
A few other items I wanted to cover, Mr. Manger. One is—and
I think you touched on this one earlier—the new platform for the
forgiveness system. That is the private software system that is
cloud-based. Is that accurate?
Mr. MANGER. That is correct. It was a, you know, off-the-shelf
platform that we identified in Capital Access that we could use
that is used by many lenders in their own, you know, work, and
that we could adopt that as a software as a service platform specifi-
cally for the forgiveness portion of the PPP. And that has been very
effective, and the team has done a great job working with us to ad-
just it so that it can be seamlessly integrated with the PPP.
Chairman CROW. So to date, it seems to be running smoothly,
from your perspective? You are not seeing any bugs or anything?
Mr. MANGER. We have not seen any problems. And, in fact, as
I mentioned early on, 98 percent—sorry, 98 percent of the lenders
have already signed up onto that platform. So we have had, you
know, again, almost 100 percent have already signed up onto that
platform.
Chairman CROW. Okay. Of the 5,000-plus, you mean?

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Mr. MANGER. Of the almost 5,500 lenders, we have 98 percent
that have signed up on the platform, yes.
Chairman CROW. Okay. So I think it launched in mid-August,
right? That is——
Mr. MANGER. It was launched August 10.
Chairman CROW. August 10, okay. How many forgiveness appli-
cations have you received since——
Mr. MANGER. So to date, we are at about 96,000.
Chairman CROW. Okay.
Mr. MANGER. Just over 96,000.
Chairman CROW. And has the SBA declined any of those appli-
cations?
Mr. MANGER. No, not at this point. We are in the process of the
review stage. So we have not declined any at this point.
Chairman CROW. So 96,000 received. How many have been ap-
proved, roughly?
Mr. MANGER. At this point, we are still going through the re-
view process, and none of those have been, you know, approved
fully.
Chairman CROW. Can you just give us a sense as to what you
expect the timeframe to be from the acceptance of a forgiveness ap-
plication to when you make a determination on an application?
Mr. MANGER. Sure. Sure. As you know, again, the lender first
receives the forgiveness request from the borrower. The lender at
that point has 60 days with which to make their decision. They
have to review the documents in-house. And then they come to the
SBA and say, we are requesting this of the SBA, to remit this
amount to us, the lender, for the forgiveness of this small business
borrower.
At that point, when they submit the request to us, the SBA has
90 days in which to review that and make a decision on the forgive-
ness. So we have up to 90 days to make that decision, sir.
Chairman CROW. Okay. And I don’t think I need to encourage
you to obviously compress that timeline, because if Congress is able
to work out a deal for extension or a second round, obviously, peo-
ple aren’t going to go for that unless they already have the deter-
mination in hand from their prior round. So I think it will just set
everyone up for better success here, and I appreciate your efforts
in that regard.
One of the things, the last question is kind of a customer service
issue that we have heard about, and that is—and this is something
that I think we can all sympathize with. When you call like an in-
surance company or something and you go through the phone tree,
and then every time they ask you for the same information, right?
And you are like, well, isn’t anyone capturing this information? The
same thing seems to be happening here, where people are going
into the forgiveness portal, have to reenter all the information that
they entered when they first applied for the loan.
So isn’t there a way to migrate that data to the new portal so
that it is already there, and we can save folks time and make it
easier for them?
Mr. MANGER. Well, sir, I understand your point. The thing is,
what was captured initially in the two-page application from a bor-
rower with the self-certifications tells at the time, you know, what

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they had on board for employees, for example. The fact is, over the
covered period, that number may have changed. And we can only
give——
Chairman CROW. I guess I am not asking for that information.
I mean, I understand that some information will change——
Mr. MANGER. Yeah.
Chairman CROW.—and the conditions will be different, and
there will be new information that is necessary for forgiveness that
didn’t apply for the original loan.
But some of the basic information, right, about the company and
things like that, like, can’t we just auto-populate that into the new
system? I am just always looking for ways to make this easier for
the businesses.
Mr. MANGER. No, and I appreciate that. We can certainly—I
will take that back and talk to the IT folks and see again about
integrating the information that came into E-Tran with the infor-
mation that is being captured on the SaaS platform.
Chairman CROW. I appreciate that. Thank you.
Now I would like to go back and recognize the gentleman from
Oklahoma for an additional 5 minutes. Mr. Hern.
Mr. HERN. Thank you, Mr. Chairman. I really appreciate those
comments you made there too because, as we are all hearing from
our businesses, it is about simplicity in the time of trying to figure
out how to keep people employed.
Mr. Manger, currently under the PPP, if a change of borrower oc-
curs, it is an automatic default unless the borrower obtains a writ-
ten waiver from the lender. As you know, the 7(a) program requires
lenders to get SBA consent for a borrower change of control. And
if you are selling a business or a transition of ownership, we have
an issue here that we need to get clarified and maybe bring some
consistency between the two programs.
Because of some preexisting 7(a) rules applied to the PPP, as
long as they are consistent, will PPP borrowers need to get SBA
consent for a change of borrower?
Mr. MANGER. So, Congressman, I appreciate that question very
much. And, in fact, I was on the phone last night with one of my
colleagues discussing just that. I have actually been on a phone call
with Congressman Balderson where he also asked the question
about change of ownership for businesses that currently have a
PPP loan.
We are working through that, and we are coming up with some-
thing I think that will make it much easier, again, for a business
with a PPP loan to be able to have a change of ownership.
So we are very near completion on that as we speak. As I said,
I was on the phone last night discussing that with one of my col-
leagues.
Mr. HERN. Have you thought through the process or addition-
ally—and I will go back to what the Chairman said, communication
is paramount here, it is critical—have you thought how you would
communicate to both lenders and borrowers this change this con-
sistency?
Mr. MANGER. We will certainly work with our office of commu-
nications and public liaison. We will certainly reach out to the
banking trade associations. And we will again try to get out the in-

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formation out on our website and all the other means possible to
make sure that they are aware of how they can make a change of
ownership.
Mr. HERN. Mr. Manger, I want you to know from me personally
as a small-business owner for years, that we appreciate and wheth-
er you are a Democrat or a Republican on this committee, we have
heard from borrowers, all over this country and they appreciate it.
And while there has been a lot of uncertainty in how the process
works, they appreciate.
This program has saved thousands, hundreds of thousands of
mom and pop businesses that may have been handed down by gen-
erations, people who took the risk, borrowed capital, started a busi-
ness that without this program would have gone bankrupt and
many still will just because of the demand for their product.
And without the SBA utilizing the banking system, other finan-
cial systems to get these moneys out, this could have been a cata-
strophic event. It was already catastrophic enough for our economy,
but because of what you did, you allowed the people to keep all of
our Americans for the most part employed where you could.
And we greatly appreciate all of the work for you and your teams
consistently coming over here. We want to make sure that message
gets back to Administrator Carranza as well Secretary Mnuchin.
He has been here and you guys have been very open to come in
and testifying before us. And we greatly appreciate you taking our
questions and going back to work fervently on solutions.
So thank you so much for being here.
Mr. MANGER. Thank you, Congressman very much. I appreciate
that.
Mr. HERN. I yield back Mr. Chairman.
Mr. CROW. Thank you. The gentleman yields back. I would like
to recognize the Ranking Member Mr. Balderson for 5 minutes.
Mr. BALDERSON. Mr. Manger, I wasn’t going to go further, but
since you brought my name up and you brought that phone call up,
when are you thinking about having release for this guidance be-
cause about our phone call was back in July?
Mr. MANGER. I understand, sir.
Mr. BALDERSON. At the end of July. And I do have several too
actually.
Mr. MANGER. I was actually hoping, Congressman, that I would
be able to have it here this morning. Unfortunately as I was on the
phone last night about it, but it is going to be imminent, imminent.
Mr. BALDERSON. Okay. Thank you.
Mr. Chairman, I yield back.
Mr. CROW. The gentleman yields back. So are there any other
members with additional questions? Online? I am not seeing any.
Okay. So I want to thank Mr. Manger for your testimony today
on the PPP program, and the data inaccuracies, and discussing the
various issues around loan forgiveness.
First off, I do want to echo my colleagues’ sentiments and reit-
erate what I said in the beginning, I recognize this was a very
heavily lift. There was no precedence for this. You were having to
build the airplane inflight and you turned around very quickly.

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And I do appreciate the hard work and the efforts of you and
your team in doing that, because it did make a difference, a very
big difference.
And in Colorado alone our estimates are that the PPP program
helped preserve over a half million jobs. So it certainly made a dif-
ference.
With that said, our job is not to pat each other on the back. Our
job is to figure out how we can make things better and improve.
And there is always improvements. And of course we serve as the
direct conduit from our constituents our businesses to the SBA.
And that is why we press you on these things, because there are
ways to improve it and make it better and we want to work with
you to do so.
I also want to reiterate that it has been, I think, over 131 days
since the House passed The HEROES Act, which provided an ex-
tension of these value programs and money to address the ongoing
concerns of businesses.
And I do recognize and appreciate Mr. Chabot’s efforts to intro-
duce a bill. I know my colleagues on the other side have issues
with the HEROES Act, and we obviously have issues with Mr.
Chabot’s bill. There has got to be a solution where we can all get
behind and figure out that everyone can live with where we can do
this.
So I am going to continue to work with my friends on the other
side of the aisle here to figure this out and push hard because we
obviously owe that to the American people and to the businesses
that are struggling it to survive. And that is what they expect of
all of us. So we will at this point to work hashed to figure out that
solution.
So with that, I think we just have the technicalities left. So I
would ask unanimous consent that Members have 5 legislative
days to submit statements and supporting materials for the record.
Without objection, so ordered.
And if there is no further business to come before the committee,
we are adjourned.
Thank you.
[Whereupon, at 11:05 a.m., the subcommittee was adjourned.]
[Mr. William Manger did not submit his Responses to Questions
in a timely manner.]

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APPENDIX

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