Senator Romney Says PPP Loan Forgiveness Will Be Flexible
About 200 people tuned into the Park City Council’s virtual roundtable on Friday. Utah Senator Mitt Romney and Representative Ben McAdams were on the panel discussing the federal response to the COVID-19 impacts on local businesses.
Park City Council Member Max Doilney said he and other small business owners are uncertain about the federal Paycheck Protection Program, known as the PPP. The second round of funding the PPP has made it through Congress and is waiting for the President’s signature. Doilney asked Romney to clarify the requirements and where people can go for answers.
Romney said the Small Business Administration will be flexible in providing loan forgiveness. He said after the first round off PPP loans, Congress found business owners had other critical fixed costs that went beyond their payroll costs. He said PPP is designed as a forgivable loan program.
“The reason we made the adjustments we did which is extending the period of time that people can use the funds to 24 weeks as well as reducing the amount necessary to be spent on employees in order to get forgiveness, we did those things in order to create greater flexibility, not to create more difficulty.”
Ninety-seven percent of the PPP that has been distributed is under $500,000. Romney said loans over $2 million will be audited by the Treasury Department to determine if they were eligible for the funds. He said some businesses expected financial hardships from the COVID-19 pandemic but they didn’t materialize.
“In anticipation that things were going to be bad, but things didn’t turn out to be bad at all and their businesses continued to operate as well, if not better than it had in the past. It is circumstances like that I think there may be an effort to scrutinize whether there should really be loan forgiveness or whether instead those enterprises should pay back the money that have been extended to them. But I would expect that forgiveness is going to be the order of the day as long as people have done their very best to abide by the provisions of the PPP program.”
Representative Ben McAdams said the average size loan is under $100,000 and he and others in Congress are working on streamlining the small loan applications.
“I’m working on the house side with a few Democrats and Republicans and calling on streamlining for some of the very small loans. So, loans lower than, less than $350,000, can we expedite that? Something like a 12-page application to the loan forgiveness and we're hoping that we can maybe streamline some of the very small businesses that have a loan of $40,000- $50,000. I'd like to see that maybe even more streamlined.”
Doilney said a lot of small business owners don’t know who to go to for answers about the changes in the PPP guidelines. Romney said it’s best to take questions to the banker or loan originator. He also encourages people to call his office with questions about the PPP.
Park City Mayor Andy Beerman said local businesses were negatively impacted by the first round of the PPP because it limited the time frame for using the funds.
“We are so service, and tourism based and when COVID hit, we were just coming into our off-season, so it was a poor fit for our businesses. And now they'll be able to access and benefit from that and it's sorely needed, so thank you for your work.”
The most recent bill offers a financial lifeline for many local businesses. McAdams said the new legislation providing a longer time frame for using the PPP money, could be helpful for many Summit County businesses that rely on seasonal tourism.
“And probably a lot of Park City businesses are seasonal in nature or their revenues may be seasonal in nature so that 24- week span will give them some flexibility to use it when they really need it.”
The entire Roundtable conversation can be foundhere.