After Listening to Small Business Leaders, Blumenthal Urges Trump Administration to Provide More Flexibility in PPP Loan Program

[WASHINGTON, D.C.] – U.S. Senator Richard Blumenthal (D-Conn.) wrote to U.S. Treasury Secretary Steven Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza to request that they consider changing the department’s interpretation of the date that lenders are required to disburse Paycheck Protection Program (PPP) loans or provide such other flexibility as will allow an extended period of time for businesses to expend the funds and qualify for forgiveness. Blumenthal sent the letter after speaking with hundreds of Connecticut employers over the past several weeks regarding concerns that they must use PPP funds within eight weeks to be eligible for loan forgiveness.

“Unfortunately, many employers have reported that the eight-week forgiveness window does not currently take into consideration businesses that will incur their greatest costs when state mandated stay at home orders are lifted and businesses are permitted to reopen,” wrote Blumenthal. “For example, businesses owners in the restaurant and hospitality industries expect to face unprecedented costs to restart their operations and would greatly benefit from receipt of PPP funds during that period. If not, they run the risk of being unable to restock their inventory, comply with new health codes, retrain staff, and purchase personal protective equipment.”

"The current guidance around this program is needlessly restrictive for small businesses, and especially for local restaurants. The restaurant industry has been severely impacted by this crisis and we need the federal government to help, and one important way it can do that is by revising this guidance and allowing more flexibility on these dates. We greatly appreciate Senator Blumenthal's efforts to seek these changes, and we stand ready to work as partners with those in government to make programs like these workable and effective," said Scott Dolch, Executive Director of the Connecticut Restaurant Association.

A copy of the full letter is below:

Dear Secretary Mnuchin and Administrator Carranza:

I write to request that the Treasury Department and Small Business Administration (SBA) strongly consider revising its guidance in the Paycheck Protection Program Loans Frequently Asked Questions (Guidance), which serves as an official interpretation of the CARES Act and PPP Interim Final Rule. In particular, I ask that you consider changing your interpretation of the date that lenders are required to disburse Paycheck Protection Program (PPP) loans or provide such other flexibility as will allow an extended period of time for businesses to expend the funds and qualify for forgiveness.

I have heard from hundreds of employers in Connecticut that are concerned about the lack of flexibility in your interpretation of the loan origination date. According to your Guidance, lenders are required to disburse PPP loans no later than ten calendar days from the date of loan approval and employers must use approved funds within eight-weeks to remain eligible for loan forgiveness. Unfortunately, many employers have reported that the eight-week forgiveness window does not currently take into consideration businesses that will incur their greatest costs when state mandated stay at home orders are lifted and businesses are permitted to reopen. For example, businesses owners in the restaurant and hospitality industries expect to face unprecedented costs to restart their operations and would greatly benefit from receipt of PPP funds during that period. If not, they run the risk of being unable to restock their inventory, comply with new health codes, retrain staff, and purchase personal protective equipment.

Congress created PPP to provide vital cash-assistance to employers who have certified in good faith that they are facing economic harm and are in need of assistance to keep their workers on their payroll. It has already proven critical to 1.6 million business owners that have received more than $350 billion in PPP loans, and there are hundreds of thousands more who have submitted new applications for consideration of the $310 billion Congress appropriated in the Paycheck Protection Program and Health Care Enhancement Act. In order to protect businesses in all affected industries, I urge you to modify your guidance and allow businesses to defer their loan disbursement dates until after mandated restrictions are lifted in their states. This will allow the employers that are intimately versed in their businesses operations to make the best informed decision.

I look forward to your response on this important matter.

Sincerely,

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