PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

SBE Council’s Kerrigan Comments on SBA’s IG Report on PPP

By at 9 May, 2020, 8:54 am

NEWS

For Immediate Release

Washington, D.C. – On May 8, the Small Business Administration’s (SBA’s) inspector general noted key areas in a “Flash Report” where the agency’s implementation of the Paycheck Protection Program (PPP) does not align with the CARES Act.  Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan issued the following statement in response to the IG report:

“Overall, the SBA largely complied with the CARES Act, which is good news for the agency, taxpayers and small businesses. Regarding key provisions, however, there’s been deviation from the legislation and we urge the SBA to address these shortcomings immediately as they are critical for millions of small businesses.

“We urge the SBA and U.S. Treasury to immediately toss out the 75-25 ratio on forgivable expenses, as this is creating hardship and concern for small businesses across industries and the country. It is a burden to many PPP loan recipients and a barrier for accessing the program. As noted by the IG report, the arbitrary 25% cap on forgivable non-payroll costs does not align with the CARES Act. And, as SBE Council and our members have noted ever since the 75-25 rule was unveiled, it does not make sense for many types of businesses and business models and this mandate was no where to be found in the legislation.

“We look forward to SBA changing this rule immediately to conform with congressional intent and the text of the CARES Act. Clarity is also needed by the SBA to allow for other essential expenses as allowable for loan forgiveness, like technology-related costs. Tech tools, platforms, and software licenses are as important as utilities and rent, and these tools have become even more important to small business survival during the COVID-19 crisis.

“We also look forward to action by SBA to outreach further to underserved and rural markets. The legislative directive from Congress that came with the second tranche of funds will help to address this issue, and progress is being made reaching smaller businesses as indicated by the average PPP loan size decreasing – and markedly so – from the first tranche of funds.”

Contact:  
Karen Kerrigan, SBE Council president & CEO
e-mail: kkerrigan@sbecouncil.org   

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For 25 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org @SBECouncil

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