Letter to Steven Mnuchin, Secretary of the Treasury, and Jovita Carranza, Administrator of the Small Business Administration - Senator Baldwin to Trump Administration: Take Action to Fix Paycheck Protection Program and Help Rescue Wisconsin Small Business

Letter

Dear Secretary Mnuchin and Administrator Carranza:

I write to you today about concerns I have heard from lenders and small businesses in Wisconsin
regarding the Small Business Administration's implementation of the Paycheck Protection
Program. I am proud that the Coronavirus Aid, Relief, and Economic Security (CARES) Act
includes reforms included in legislation I authored (S. 3541) to provide small businesses with
loan forgiveness if they keep employees on their payroll. Wisconsin small businesses and nonprofits need help meeting their payroll and covering other operating expenses and PPP is
uniquely suited to achieve those goals by allowing banks to leverage their expertise and offer
SBA-guaranteed loans to their customers. However, I've heard from lenders in Wisconsin that
are frustrated and confused with the rollout of this program and unable to make loans. I have
also heard from small businesses that can't access loans. I ask you to immediately take action to
ensure banks can swiftly provide these loans and help rescue Wisconsin small businesses and
non-profits.
Numerous banks in Wisconsin have reported difficulty accessing the SBA's E-Tran system and
those banks that have been able to access it report technical issues with the website. I urge you to
work to provide additional technical capability and support. Technical issues with SBA's
systems threaten to harm small businesses and non-profits that desperately need financial support
in a timely manner. I have further heard from lenders that in completing the loan application
process, confusion remains regarding questions of loan documentation and calculating payroll
costs. I urge you to work with lenders to provide clear, unambiguous guidance on these
questions. If the banks charged with making loans to small businesses and non-profits can't
make loans, small businesses and non-profits will not get the aid they desperately need.
I have heard concerns from businesses that can't access loans because they didn't have an
existing relationship with an SBA-approved bank. For example, Norske Nook, an iconic pie
shop with locations in Osseo, Rice Lake, Hayward and DeForest Wisconsin, went to their local
bank to apply for a Paycheck Protection Program loan. Because their local bank is not an SBA
preferred lender, they have not been able to access a loan yet. Norske Nook then went to an
SBA preferred lender but was unable to access a loan in a timely manner because they didn't
have an existing relationship with the bank. The SBA needs to make immediate changes to
allow companies like Norske Nook to receive this critical aid provided by Congress.
Additionally, last week, the U.S. Treasury issued guidance that in order for loans to be forgiven
by the Paycheck Protection Program, 75 percent of the loan must cover payroll costs. I'm
concerned that this rule, which was not in the text of the CARES Act, prevents small businesses
with high overhead costs from accessing the program and keeping their workers employed. Scott
Brown, a small business owner who operates two Cold Stone Creamery locations in Appleton,
Wisconsin, told me that he is concerned that without flexibility to spend more of the loan on rent
and other fixed costs, the businesses may not survive. I urge you to change the PPP's rules to
allow small businesses to spend a greater amount of their loan on fixed costs. Without this
change, I fear that we will see a wave of small business closures and bankruptcies.
I thank you for your attention to this matter and please let me or my office know if we can be of
further assistance.
Sincerely

Source