Small Business Subcommittee Examines Paycheck Protection Program Loan Forgiveness

Statement

Today, the House Committee on Small Business Subcommittee on Innovation and Workforce Development heard from Small Business Administration (SBA) Associate Administrator William Manger on the Paycheck Protection Program (PPP) Loan Forgiveness process.

"As we all know, the CARES Act initiated by the landmark Paycheck Protection Program, or PPP, that provided small businesses partially forgivable, low interest loans to keep their employees on the payroll during the pandemic," said Ranking Member Troy Balderson (R-OH). "The topic of today's hearing is of critical importance, as we have the chance to hear from the SBA about how their systems dealt with the stress of overseeing over 5.2 million PPP loans over 4 months."

Associate Administrator Answers Questions About Loan Forgiveness

"To receive loan forgiveness, borrowers are responsible for submitting a loan forgiveness application and the required supporting documentation to their lender. Lenders are then responsible for reviewing the documentation and issuing a decision to the SBA within 60 days of receiving the application," said Mr. William Manger, Small Business Administration Chief of Staff, Associate Administrator, Office of Capital Access, Small Business Administration, in Washington, DC. "Within 90 days of the lender decision and submission to the SBA, and subject to any SBA review of the loan or the loan application, the SBA will remit the appropriate forgiveness amount to the lender plus any interest accrued through the date of payment."

Regarding data discrepancies and collection, Mr. Manger said, "…SBA created a process for lenders and borrowers to correct information that they had inputted into the system. We also adjusted how the system designated zip code information within Congressional Districts. This data will be further refined through the collection of information during the loan forgiveness process."

In response to questions about fraud detection, Mr. Manger said, "We have brought on several contractors to help us. We have developed an automated tool that all loans will be run through that verifies data that is publicly available through LexisNexis. That is the first stage. Then when we see how the loan is doing after that, it will come to folks for manual review. I mention that we have brought on a total of 1,100 new folks to help do the manual reviews of the loans. That's using contractors as well as SBA staff. …We have another contractor we have brought on …that will be doing quality assurance of the platform."

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