PIA Comments on Paycheck Protection Program Rule

On May 15, PIA National submitted a response to the interim final rule promulgated by the U.S. Small Business Administration (SBA) regarding its implementation of the Paycheck Protection Program (PPP).

The PPP was created by H.R. 748, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Pub. L. 116-136). In the CARES Act, Congress authorized funding of $349 billion for PPP loans, a sum that was exhausted less than two weeks after the lending program began. Congress subsequently authorized an additional $310 billion in funding, of which about one-third remains available as of this writing.

The Interim Final Rule outlined existing guidance intended to aid small businesses in the process of applying for a PPP loan so that they can apply for and promptly be provided with potentially forgivable loans. The last day to apply for and receive a PPP loan is June 30, 2020.

PIA National is focused on ensuring small businesses can access the liquidity they need during these tumultuous economic times. In our comments, we made clear the rollout of the PPP posed unnecessary challenges to small business applicants and that lending institutions, and even the SBA’s own website, appeared to be unprepared for the influx of loan applications they would receive.

Likewise, Congress underestimated the volume and extent of the loan requests that would be received, as evidenced by the fact that the program’s billions of dollars were depleted in merely 12 days.While the program is designed to accept applications until June 30, it seems likely to run out of money again well before that date. Additionally, because funds are distributed on a first-come, first-served basis, if the program’s funding is exhausted before June 30, absent another intervention from Congress, some applicants are likely to be left without any PPP assistance at all.

The SBA will now consider what, if anything, it should change about the PPP based on the thousands of responses it has received. At the same time, in each chamber of Congress, bills are pending that could substantively change the mechanisms of the PPP, and those bills, many of which were introduced after the publication of the interim final rule, are thus outside its scope.

PIA National will continue to work with policymakers and the SBA going forward to improve the PPP so that it provides the type and degree of support needed for as many as possible of the nation’s small businesses to successfully emerge from the current economic crisis.