Banking Leader Wants Simplified Pandemic Loan Forgiveness For Businesses
The head of a South Dakota banking group says Congress should make it easier for small businesses to get pandemic loans forgiven.
Curt Everson is president of the South Dakota Bankers Association. He’s also on the state Council of Economic Advisors. The council met Tuesday by Zoom.
Everson says bankers are worried about the Paycheck Protection Program. That’s the emergency loan program created by Congress during the pandemic. The Small Business Administration used local banks to make the loans.
The loans are forgivable if most of the money is spent on payroll. But Everson says the process is complicated.
“The loan forgiveness forms and processes that Treasury developed and gave to SBA look like something that came out of the IRS, honestly.”
Everson says that’s put a burden on small businesses.
“We kind of feel as the lending industry that the small-business community has enough challenges facing them right now. They don’t need to go through and have to hire CPAs or lawyers to help them fill out their PPP loan forgiveness application.”
He says Congress should adopt a simpler forgiveness process for loans under $150,000. Eight-seven percent of the loans in South Dakota are under that amount.
“It would be nice to be able to have those loans be forgiven by a simple, one-page attestation by the borrower that says, ‘I spent the money the way Congress intended.’”
Everson also says the government won’t pay loan service fees to banks until the forgiveness process is complete. He’s worried that could take a long time if the forgiveness process is not simplified.
The Paycheck Protection Program loaned $525 billion nationally to more than 5 million businesses. In South Dakota, about 23,000 businesses received loans totaling $1.7 billion.
-Seth Tupper is SDPB's business and economic development reporter.