Recap of last week’s numbers
In the July 10th edition of the Paycheck Protection Program report, the Small Business Administration released updated loan approval data. Cumulative loans increased by 1,514 up to a total of 158,328. Meanwhile, the cumulative dollar amount of loans decreased by $170,766,592, down to a total of $14,332,157,048. While the month of July has shown a decline in business due to the resurgence of COVID-19, it seems that these numbers haven’t been reflected yet in the PPP.
In The News
Treasury Secretary Steven Mnuchin suggested Friday that the government should consider forgiving all taxpayer-backed small loans under the federal Paycheck Protection Program without verifying how the funds were used, a decision that could wipe away debt for millions of small businesses but would also substantially increase the risk of fraud.
The Treasury Department and Small Business Administration are grappling with how to handle millions of applications for loan forgiveness, a process that includes verifying that most of the funds were actually used to pay employees as required under the Cares Act. But Mnuchin seemed to suggest during a congressional hearing Friday that a case-by-case approval process should be waived entirely for loans below a certain threshold.
“OIG has active investigations involving the loan programs authorized by the Cares Act, to include the EIDL program,” Sheldon Shoemaker, the SBA’s assistant inspector general for management and operations, said via email. “As indicated in recent press releases, there have been a variety of fraud schemes employed. At this time, we cannot discuss the specifics of ongoing investigative activity.”
With the economy in free fall this spring, Congress pushed the SBA to disburse the disaster money more quickly to keep Main Street businesses alive. But the SBA has struggled to keep up with a flood of more than 9 million applications, nearly 100 times what it had received in previous years.
Businesses, meanwhile, have complained about receiving too little information on their applications. “Many received an advance and didn’t know what it was,” said Holly Wade, director of research and policy analysis for the National Federation of Independent Business. “It’s just been an ongoing frustration.”