MSCI Fights Intrusive SBA Loan Forgiveness Form
Earlier this fall, the U.S. Small Business Administration (SBA) published notice of a 30-day public comment period regarding a series of information collection forms Paycheck Protection Program (PPP) loan borrowers must complete. That information included a new “Economic Necessity” Form that borrowers who took more than $2 million would be required to finish.
These forms demand information that was not previously required from borrowers, which is why, on November 17, the Metals Service Center Institute (MSCI) joined a broad coalition of traditional trade associations in sending one letter to congressional leaders and one letter to U.S. Treasury Steve Mnuchin and SBA Administrator Jovita Carranza strongly objecting to the form and asking that it be withdrawn. (Those letters are available here and here.)
MSCI and the letter’s signatories said, “[W]e are concerned that the questionnaires introduce a confusing and burdensome process for both borrowers and lenders, and we fear that it could lead the agencies to inappropriately question thousands of qualified PPP loans made to struggling small businesses.”
One of the organizations that signed the letters, the S-Corp Association,) said the form “represents a massive hedge for the government” and argued, “Businesses held up their end of the bargain by using the funds to pay employees and rents, but now the government wants to back out of the deal and force them to repay the loans, notwithstanding the fact that all the money is gone.”
While the form is still not available on the SBA or Treasury websites, the SBA has begun making it available to lenders despite the fact that the 30-day comment period on the forms has not yet passed. Lenders also have started sending the form to their PPP borrowers, triggering the 10-day period within which the borrower must return the form to the lender. Based on the feedback from some companies, it also appears the lenders’ collection of information has been intrusive and is not related to “economic necessity.”
Stay tuned to Connecting the Dots for more information as these issues are resolved.