It is heartening to hear another Congressional effort to support small business through proposing the “ Paycheck Protection Small Business Forgiveness Act .”
This proposed bill will allow automatic forgiveness for Paycheck Protection loans under $150,000. Now that Congress has passed the Paycheck Protection Flexibility Act to extend usage from 8 to 24 weeks, most small businesses would be able to use the full loan for payroll expenses while they are barely reopening.
Therefore, the risk of misappropriating loan expenditure is low compared to the benefits to small businesses. They will not be burdened with the time-consuming paperwork preparation process and the 1% interest they incur since the loan inception day will stop accruing immediately.
As the pandemic is extending its impact, small businesses are overwhelmed with additional safety requirements. They need to focus on safe reopening and to build new business survival models.
Since the majority of Paycheck Protection Program loan recipients are small businesses and nonprofits, making the forgiveness process easy is only a small gesture to ease their pain.