Feds working out what next business loans will look like

Washington DC Bureau

WASHINGTON (NEXSTAR) — U.S. Treasury Secretary Steven Mnuchin testified before Congress Friday to explain exactly how Payroll Protection Program loans are being dispersed.

Democrats and some Republicans are unsure the program has been executed fairly and are demanding more transparency, but Mnuchin has called PPP a success and is pushing to extend it further.

“We remain committed to working together until every American gets back to work as quickly as possible,” he said.

As coronavirus infection rates soar in some states like Florida and Texas, Mnuchin told lawmakers new loans should be extended to small businesses now facing a second round of closures.

“But on a more targeted bases for smaller companies and those that are especially hard-hit,” he told lawmakers, saying restaurants and hotels would be top priority.

Some lawmakers, however, say the priority should be getting cash to small businesses that still haven’t managed to get an initial loan, even while larger, well-connected companies rack up millions in aid.

“Communities like mine, quite frankly, were left behind,” Rep. Abby Finenauer, D-Iowa, said.

She and Rep. Steve Chabot, R-Ohio, want to see a focus on helping rural and minority communities access loans.

“We must examine, learn from the past and prepare for the future. Unfortunately, there are still challenges that are presenting obstacles for the nation’s smallest firms,” Chabot said.

Rep. Sharice Davids, D-Kan., said the administration must be more transparent to prevent abuse and help borrowers.

“There’s a lot of information we still don’t know,” she said, “like what loan forgiveness rates will look like, the rate at which minority businesses have received loans. And this information is essential.”

“We’re going to have a very robust process to review loans before loans are forgiven,” Mnuchin promised.

He said companies deemed ineligible have already returned some $30 billion in loans.

There is still $130 billion in PPP money waiting to be distributed. Mnuchin said the next federal stimulus package will also include some money to help businesses access new loans.

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