Treasury Secretary Steven Mnuchin told lawmakers on Friday that they should consider automatic forgiveness for many loans under the Paycheck Protection Program, the $670 billion government-backed rescue of small businesses.
“I know one of the things we’ll talk about is: Should we just have forgiveness for all the small loans?” Mnuchin said during testimony to the House Small Business Committee. “That’s something we should consider. We should obviously make sure there’s some fraud protection.”
He didn’t specifically endorse the threshold of forgiveness for all loans of $150,000 or less that a large group of industry trade associations have advocated for.
The Treasury chief’s comments come as Congress is considering another coronavirus relief package, including for businesses. The small business aid program, under which loans can be forgiven if companies meet certain benchmarks, is scheduled to end Aug. 8.
Treasury and the Small Business Administration earlier this month released the names of more than 650,000 employers that received PPP loans larger than $150,000, but more than 80 percent of the transactions stood below that threshold. More than 4.7 million businesses have taken the loans. Roughly $130 billion remains unspent.
Mnuchin said the administration supports adding more funds to the pot for the program, as well as allowing the hardest-hit businesses to get a second payment.
“This time we need to have a revenue test and making sure money is going to businesses that have significant revenue declines,” Mnuchin said, adding that no preference should be given to specific industries.
He also said he’d be happy to work with Congress on additional restrictions, like conflict-of-interest provisions. Critics have pointed to PPP loans given to businesses tied to both members of Congress and the family of President Donald Trump.
The administration has not yet opened a online portal through which banks can apply for loan forgiveness on behalf of clients, something Small Business Administrator Jovita Carranza said they were working to have up and running by August. Carranza testified alongside Mnuchin.
“We’re going to have a very robust process to review loans before loans are forgiven,” Mnuchin said. “In the forgiveness process, people will be required to provide much more data and that data will be released.”
He said businesses would have to provide detailed information on how much money was used to pay workers and the number of jobs that were retained.