U.S. Sen. Martha McSally (R-AZ) said it is imperative that the U.S. Treasury Department and the Small Business Administration (SBA) quickly issue guidance clarifying the prioritization of applications for the Paycheck Protection Program (PPP), authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The guidance also should address how financial institutions will assist businesses that were either denied PPP funds due to a lack of relevant guidance at the time of their application or were not given timely consideration based on the date of their application, Sen. McSally wrote in an April 24 letter sent to U.S. Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza.
“The PPP is run on a first come first serve basis, however there are no regulations or legislation governing the manner in which financial institutions process applications,” Sen. McSally wrote.
Congress initially appropriated $349 billion for the PPP and the SBA began approving PPP loans on April 3. But in less than two weeks the program was insolvent due to high demand, according to Sen. McSally’s letter.
“Many small businesses were forced to wait until April 14, 2020 to submit an application due to a lack of guidance focusing on the smallest entities, including independent contractors and other self-employed individuals,” Sen. McSally wrote. “That means millions of small businesses around the country were forced to wait to apply and placed behind thousands of other applications with only a minimal amount of funds available – through no fault of their own.”
At the same time, between April 3 and when funding expired on April 16, many businesses submitted applications but never received funding, either due to a lack of guidance or financial institutions prioritizing certain customers, wrote Sen. McSally.
She also requested that the Treasury Department and the SBA take additional steps to ensure financial institutions are fulfilling the intent of the law and serving businesses of all sizes equally.