The Home Furnishings Association and more than 100 other business groups continue pushing Congress for easy PPP loan forgiveness.
So is Bobby Leon, owner of HFA member Chesnick Furniture in Victoria, Texas. And he helped win over his congressman.
Congress has failed to advance any new COVID recovery legislation since April. Yet, HFA priorities are clear. While many furniture retailers have bounced back with strong sales, they still need forgiveness of Paycheck Protection Program loans and liability protection.
Also, a new, longer-term lending structure must be put in place in case businesses need more help later this year or in 2021. The HFA supports the proposed RESTART Act for that purpose.
But Congress has done nothing for months – even though senators and representatives of both parties agree on some sensible initiatives.
Legislation offers 100 percent loan forgiveness
The bills provide for 100 percent automatic forgiveness of PPP loans up to $150,000 with the submission of a one-page application attesting that funds were spent for the required purposes.
This would eliminate hours of burdensome paperwork for both lenders and borrowers and effectively turn relatively small loans into grants.
Leon was ready to start the process of applying for loan forgiveness, but his accountant advised him to wait in case Congress decides to change the rules. Accountants across the country are offering that same counsel to small business clients who received PPP loans.
Then, last week, Leon happened to meet with his congressman, U.S. Rep. Michael Cloud, a Republican. The two have a friendly relationship. Leon talked up the loan forgiveness proposal – and shortly thereafter, Cloud signed on as a co-sponsor of H.R. 7777.
Leon doesn’t claim credit, asserting that others could have made the same points to Cloud. But by speaking up for the interests of small businesses, Leon reinforced an important message.
It is the same message that HFA, as part of a large coalition of trade associations, banks, credit unions, financial institutions and other businesses, conveyed in a letter to Senate leaders. They asked for an immediate vote on S. 4117, a bipartisan bill introduced by Senators Kevin Cramer, R-S.D., Bob Menendez, D-N.J., Thom Tillis, R-N.C., and Kyrsten Sinema, D-Ariz.
Do away with costly, time-consuming paperwork
“Small businesses across the country are facing the time-consuming and costly process of applying for PPP loan forgiveness,” the coalition wrote to Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y. “S. 4117 ensures those owners can focus their time, energy and resources back into their business and communities instead of allocating significant time and resources into completing complex forgiveness forms.
“PPP loans of $150,000 and under account for 87 percent of total PPP recipients, but less than 28 percent of PPP loan dollars,” the coalition added. “Expediting the loan forgiveness process for many of these hard-hit businesses will save more than $7 billion and hours of paperwork.”
Currently, borrowers must submit detailed records of their spending of PPP proceeds. If any of their expenditures don’t meet the stated criteria, those portions must be repaid with interest. However, HFA believes spending for all legitimate business purposes should qualify for forgiveness. Congress can allow that through this legislation.
Contact your senators and representatives
HFA members should contact their senators and representatives and urge them to support S. 4117 in the Senate and its counterpart in the House, H.R. 7777. Their contact information is here.
In joining with a large business coalition, HFA speaks with a louder voice. But individual HFA members can use their voices to speak directly to their elected representatives. As Bobby Leon showed, that can get results.
Other members of the coalition include the U.S. Chamber of Commerce, American Bankers Association, National Retail Federation, the National Federation for Independent Business, Small Business Majority, the National Restaurant Association and the Decorative Hardwoods Association.
Not a member of the HFA? Let us know you’re interested and join your voice with ours!