By Zachary Warmbrodt 10/02/2020 04:27 PM EDT
The Trump administration will streamline the process for converting coronavirus payroll protection loans into grants, Treasury Secretary Steven Mnuchin said Friday, amid growing concern about the small business rescue.
In a virtual fireside chat hosted by Rep. Tom Reed (R-N.Y.), Mnuchin said officials were “working on a solution” for Paycheck Protection Program loans of $50,000 and less. He said the changes would make the loan forgiveness process at least “slightly easier.”
“Hopefully, we’ll roll that out within the next week,” he said.
Mnuchin announced the change as lenders who issued the loans warn of growing complications and confusion around the forgiveness application process. The promise of converting the loans into grants in exchange for keeping employees paid was a key selling point for businesses to take the government-backed loans.
Mnuchin said the administration supported a bipartisan proposal in Congress to simplify the process for loans of $150,000 and less but that “unfortunately without legislation there’s only so much we can do.”
Separately Friday, the Small Business Administration, which is running the program in partnership with Treasury, released new guidance related to the treatment of Paycheck Protection Program loans when there is a change of ownership with the borrower. It’s one of several areas where lenders have sought clarification as businesses begin filing applications for loan forgiveness.
The Trump administration is facing calls from Congress to accelerate the loan forgiveness process after it was revealed last week that the SBA had received 96,000 forgiveness applications but had not approved or denied any of them. On Tuesday, a Treasury spokesperson said forgiveness decisions and payments were expected to start flowing late this week or early next week.
“The portal is open,” Mnuchin said. “I would encourage businesses to go ahead and apply for forgiveness so they can be processed.”