Sen. Marco Rubio letter to SBA Administrator Isabella Guzman on PPP loan forgiveness (March 24, 2022)

Summary

A letter dated March 24, 2022 from Senator Marco Rubio to SBA Administrator Isabella Guzman on delays in Paycheck Protection Program loan forgiveness. Rubio notes that Section 307 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act requires a simplified application for loans under $150,000 and says such loans shall be forgiven. He cites a backlog of more than 63,000 unresolved forgiveness applications, approximately 1.4 million loans under $150,000 whose borrowers have not yet applied, and some of the country's lowest 2020 forgiveness rates in majority Black or Hispanic zip codes including Miami-Dade, Broward and Osceola counties in Florida. He asks questions ranging from the backlog timeline and outreach to loans of $50,000 or less and borrowers whose lenders were identified as fraudulent, with answers by Thursday, March 31.

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Full text

                                                     March 24, 2022


The Honorable Isabella Guzman
Administrator
U.S. Small Business Administration
409 3rd Street SW
Washington, D.C. 20416


Dear Administrator Guzman:

       I write to again call your attention to the thousands of small businesses who continue to
experience lengthy delays in Paycheck Protection Program (PPP) loan forgiveness.

        As you know, PPP was a historic and bipartisan program that helped small businesses
and nonprofits survive the COVID-19 pandemic. It was based on the simple idea that eligible
small businesses and nonprofits could take out emergency loans, and then receive loan
forgiveness to the extent they spent the proceeds on essential costs, including payroll and rent.
This structure helped millions of small businesses not only survive the pandemic, but keep their
employees working.

       Recognizing the importance of PPP loan forgiveness in achieving these goals, Congress
has repeatedly acted to streamline the loan forgiveness process for PPP borrowers. Most
importantly, for small borrowers, Section 307 of the Economic Aid to Hard-Hit Small
Businesses, Nonprofits, and Venues Act, directs the SBA to make available a simplified
forgiveness application for borrowers of PPP loans under $150,000. Congress was clear that PPP
borrowers who validly completed this application “shall be forgiven.”1 In other words, for small
borrowers that follow the rules, loan forgiveness is mandatory.

       Despite this clear mandate from Congress, it appears that a significant number of
borrowers continue to experience delays in loan forgiveness. According to the most recent data
available, the SBA has a backlog of more than 63,000 unresolved loan forgiveness applications.
Additionally, there are approximately 1.4 million PPP loans of less than $150,000 still
outstanding in which the borrower has yet to apply for loan forgiveness.

       Of further concern, the most recent data available shows that businesses in zip codes that
are majority Black or Hispanic, including in Miami-Dade, Broward, and Osceola counties in
Florida, had some of the lowest 2020 PPP loan forgiveness rates in the country. For an
administration that has pledged to make racial equity a central plank of its agenda, these numbers
suggest a remarkable lack of responsiveness to underserved communities.


1
    Pub. L. No. 116-260, tit. III, Section 307(a)(3), 134 Stat. 1998.
       These delays have left deserving small business owners under a cloud of ambiguity or
saddled with looming debt payments that they simply cannot afford. This is unacceptable. I call
on your agency to do its job and ensure that every PPP loan recipient that is eligible and wishes
to apply for loan forgiveness receives it without delay. As such, I ask you to respond to the
following questions by Thursday, March 31:

   •   What steps will the SBA take toward fully eliminating the PPP loan forgiveness
       application backlog?
   •   What is the SBA’s expected timeline to fully eliminate its PPP loan forgiveness
       application backlog?
   •   What steps has the SBA taken, and is planning to take, to ensure that PPP loan recipients
       who have not received loan forgiveness are aware of the forgiveness options available to
       them?
   •   What specific steps is the SBA taking to increase the forgiveness rates for loan recipients
       of loans of $50,000 or less?
   •   What steps has the SBA taken to reach out to, and resolve, challenges for loan recipients
       who worked through lenders that the SBA or Department of Justice have been identified
       as fraudulent or problematic?
   •   What steps will the SBA take to work with minority and low-income communities
       experiencing low loan forgiveness rates?

        These are not simply numbers on a spreadsheet. These are real parents, families, and real
small businesses that have experienced some of the hardest years to run a business in living
memory. They have shown remarkable resilience, and should not be saddled with crippling debt
or forced to close their doors due to the SBA’s lack of responsiveness.

        I look forward to your response, and urge you to take appropriate action to resolve these
issues immediately.


                                              Sincerely,




                                            Marco Rubio
                                            U.S. Senator


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