Policymakers should consider general forgiveness for all small businesses that received loans from the Paycheck Protection Program, Treasury Secretary Steven Mnuchin said on Friday.
Mnuchin told lawmakers that they should consider this approach to reduce complexity, along with some form of fraud protection.
He also said the Trump administration supports adding more funds to the $ 660 billion program, as well as allowing especially affected companies to apply for a second emergency loan.
He did not define how small a loan would have to be to qualify for automatic forgiveness, adding that it must be combined with some form of fraud protection, without going into details. Several business and banking groups have lobbied for general forgiveness of all loans below $ 150,000, arguing that the requirements for applying for forgiveness under the program are too complex.
His comments come as Congress is preparing more financial aid legislation to support businesses and people hurt by pandemic closings. Approximately $ 100 billion remains in the PPP, a forgivable loan program created by the initial stimulus package and due August 8.
Mnuchin added that he would also support the application of some kind of “income test” to future PPP loans to ensure that the remaining funds go to the companies that need it most. The PPP has come under fire after rich and large companies obtained loans under the program, which was seen as a relief for small businesses.
“This time, we need to have proof of income and make sure the money goes to companies that have a significant decrease in income,” he said.
He also said he would support efforts to set aside a portion of the remaining PPP funds for minority-owned companies, amid concerns from some lawmakers that those companies were struggling to secure funding.
