'False hopes’: Small business rescue faces crunch just days after Congress extended it

'False hopes’: Small business rescue faces crunch just days after Congress extended it

By Zachary Warmbrodt

04/05/2021 05:49 PM EDT

Washington's nearly $1 trillion small business rescue, now under the watch of President Joe Biden, is about to slam into a new obstacle — it’s already running out of money.

Treasury Department Encouraged Banks to Prioritize Existing Customers for PPP Loans, House Panel Says

“The Members of Congress drafting this report are highlighting the issues directly related to the way they structured the program and banks raised with them and SBA during the breakneck implementation,” said Richard Hunt, chief executive of the Consumer Bankers Association, a trade group for retail banks. Mr. Hunt said the program’s average loan size, at $100,729 , proved “banks were able to reach those businesses most in need.”

SBA streamlines forgiveness for PPP loans of $50,000 or less

Trade groups for banks and credit unions have lobbied hard for simplified forgiveness. They showed no inclination of abandoning their efforts after the SBA's announcement late Thursday.

Consumer Bankers Association President and CEO Richard Hunt called the streamlined application a move in the right direction, but he said it didn’t exempt enough borrowers and was still too complicated.

U.S. government simplifies forgiveness process for smallest pandemic aid loans

According to a September report by the Government Accountability Office, a watchdog for the U.S. Congress, a loan forgiveness application could take some borrowers 15 hours to complete, and a complex application could take a bank 50-75 hours to review.

The Consumer Bankers Association, a trade group, welcomed the latest measure, but said there was more work to do.

“It is apparent Congressional action is needed for the true streamlined forgiveness mom-and-pop businesses need,” it said in a statement.

Small-Business Loans Will Be Forgiven, but Don’t Ask How

Lenders said the change was a start but did not go far enough. The Consumer Bankers Association, an industry group, renewed its call for all loans under $150,000 to be automatically discharged.

“It’s almost a nightmare to go through the forgiveness process as it is now written,” Richard Hunt, the group’s chief executive, said. “You have millions of small businesses in crisis, some going under, and Congress is not there in their time of need.”

Wall Street’s regulatory gains set to stand even under Biden

Overall, though, lobbyists said they would expect a diverse mix of progressives and moderates, even though few are likely to come straight from Wall Street.

"I don't think you'll see the progressive liberals getting all the appointments they want," said Richard Hunt, CEO of Washington group the Consumer Bankers Association.

Biden's campaign, which did not immediately comment, has said he plans to use all available tools to reverse Trump's damaging policies. Warren's office did not respond to a request for comment.

OCC's Brooks sees 'overlap' with Fed on CRA

“There's a significant amount of overlap between what the Fed has proposed and what the OCC has finalized,” Brooks said in a pre-recorded interview shared by the Consumer Bankers Association during a virtual event Thursday afternoon.

Banks face a unique coronavirus problem: Now everyone is wearing a mask

“Wearing a mask at any businesses, especially a bank, just a few months ago would have raised a lot of eyebrows,” said Richard Hunt, president of the Consumer Bankers Association.

Both Democrats, GOP are now on board for a second wave of PPP loans

In a statement released shortly after Collins and Rubio spoke, Consumer Bankers Association President and CEO Richard Hunt called for more detail on how the loan forgiveness process would work. Hunt said that the most basic current process requires significant resources of a small business, and “Congress must improve the forgiveness language by providing crystal-clear, prescriptive guidance.”

As PPP funding runs out, Hunt says demand may be $1 trillion

That’s how fast the Small Business Administration has been providing delegated authority to lenders to disperse PPP loans. By mid-afternoon Wednesday, $5 billion in approvals was being granted every two hours.

Consumer Bankers Association President and CEO Richard Hunt said on a conference call that the program might need $1 trillion before it’s done.