Over the past several months, this committee has held numerous hearings on the ppp and heard from borrowers and challenges theyve faced in accessing the program. Ive travelled through the districts to speak with Business Owners about how they faired through the pandemic. And ive heard some of the successes and challenges they face with the ppp. And uncertainty about what the future holds. From borrower who is eventually access the loan, the Committee Heard concerns about complicated and conflicting Program Rules and other requirements associated with loan forgiveness. Lenders also expressed a great deal of frustration over the needlessly complicated rules and reported feeling unable to adequately help their borrowers through the forgiveness process. Through it all, borrowers simply wanted to ensure they were using loan for proceeding consistent with the law so they could qualify for full loan forgiveness and effectively convert the loan into a grant which was the congressional intent in the c. A. R. E. S. Act. Loan forgiveness is a centerpiece of the Paycheck Protection Program, especially since the expectation by many borrowers and lenders was that the loans would be fully forgiven. Less than full forgiveness where a large body of loans could have serious unintended consequences for borrowers and lenders who have developed business plan. Treasury recognized how challenging the initial lone forgiveness application was and released an ez application form. Unfortunately, borrowers and lenders alike have reported no material differences between the forms and calls for streamlined application for the form where streamlined borrowers have increased. In the meantime, lenders have remained leading to great anxiety and helplessness among borrowers who just want to do things the right way. I need clear and simple rules from sba and treasury to do so. And finally we have some data to corroborate what the Lending Community has been reporting anecdotally this week, the Government Accountability office, gao, published a new report showing that of september 8th, only 56,000 forgiveness decisions from lenders and representing just over 1 of the over 5. 2 million ppp loans outstanding. This figure substantiates what the Lending Community has been reporting anecdotally. First borrowers are struggling to simply understand the terms and data needed to accurately complete the form. And second, lenders are limited in their ability to provide Technical Assistance to borrowers completing the forms because of the insufficient guidance. So, as we enter the forgiveness period, it is timely to conduct this hearing dedicated specifically to loan forgiveness so that our subcommittee can assess the issues faced by borrowers and lenders and weigh proposals to provide relief for borrowers who need it. And i look forward to the discussion today and look forward to taking the time to testify before us. I yield to the Ranking Member for his opening statement. Thank you, mr. Chairman. And thank you for holding this very important and timely hearing. Small businesses across this nation from my astate of oklahoma to the chairmans district in unanimously nj have been disproportionately devastated by covid19. When it reached our country, congress acted fast. Numerous programs were created and amended to provide assistance to the American Public and our economy. One of these programs was the Paycheck Protection Program. In a matter of days outlined rules and regulations so lenders could assess Small Businesses from coast to coast. The federal government moved quickly and i would like to commend them for that. One of the top sba officials in charge testified yesterday and presented Important Information to our committee. Todays conversation will build on that hearing and well focus on the critical aspects of pp loan forgiveness. As a Small Business owner and founder of a Community Bank in oklahoma, i can see how difficult this process can be for borrowers and lenders alike. My goal and i would like to think of it the same for my fellow Committee Process is to get this process as simple and efficient as possible. We ask our lenders to carry a heavy burden and our Small Businesses are being crushed under circumstances out of their control. We owe it to them to discuss further ways to streamline the process. Unfortunately, road blocks continue to hinder how congress can provide more assistance while improving the program. Just this week, we tried and failed to get a vote on congressman Steve Chabots 8265 that would improve and extend the popular program. More work needs to be done and that is why this hearing is paramount. Small businesses and lenders need full rules of the road in order to make everyday business decisions. Changing guidance has presented challenges we need to Seek Solutions to so this process can be improved. I look forward to exploring many of the topics today with our witnesses. However, i know there were some concerns that a witness put forward about a specific member of the house and the way their office conducts business. Even though this member is not here to defend himself. This however is not how we conduct business in this committee. We routinely strive to work in a bipartisan manner. Its important that we do. And we do not attack one another for political gain. And i amex tremely disappointed that my colleagues would allow this testimony to be on the record. Truthly, many of the problems our witnesses bring up today could be solved if the majority could recommend the bill to come for a vote. As most of them, if not all, would support it. All of them have the opportunity to allow this bill to come for a vote by signing the discharge petition for 8265 which was filed by representative jamie herrerabeutler earlier this morning. So, i urge my colleagues to take action to help the Small Businesses, each District Across the country, by signing the discharge petition on the common sense legislation which they all support behind the scenes. I would also like to say this is the second time ive been disappointed by the majority selection of a witness, and i hope this is not a signal the committee is becoming. Thank you, mr. Chairman, i yield back. Thank you mr. Hern. I appreciate your comments. I would like to take a moment moment to explain how this hearing will proceed. Each witness will have five minutes to provide a statement, and each Committee Member will have five minutes for questions. Please ensure that your microphone is on when you begin speaking and you return to mute when you are finished. I would like to introduce our witnesses. Our first witness today is ms. Lynn ozer, president of the fulton bank in lancaster, pennsylvania. Sheing manies all of the sba lending which covers my home state of new jersey, maryland, pennsylvania, virginia, washington, d. C. And 249 office locations. She graduated magna couple laud from the university where she earned a bba degree majoring in accounting. She served as the first female chairwoman of the board of directors of the National Association of government guaranteed lenders, and she is presently cochair of the issues committee while serving as instructor for the administration. Our second witness is amy bonfig. When so few ppp borrowers had applied for loan forgiveness, ms. Bonfig has also started an Informal Network of fellow Child Care Centers in minnesota to help them work through the forgiveness application process. Ms. Bonn fig, we look forward to hearing your feedback on the loan forgiveness application process as a borrower. During his career he has produced hundreds of multilingual documentary programs for corporate and nonprofit clients. He has also faced serious obstacles with the ppp forgiveness process, and we look forward to hearing his perspective on the issues as well. Thank you for joining us today from the new jersey third congressional district, mr. Parker. I would now like to yield to the Ranking Member, mr. Hern, to introduce our final witness. Thank you, mr. Chairman. Our next witness is pete patel. Mr. Patel is the ceo and president of Promise Hotels, a company he founded with his wife 12 years ago. Promise hotels is a Hospitality Business group that runs a dozen hotels in the tulsa, oklahoma, area, my district. With 25 years experience, mr. Patel is a current board member of the Oklahoma Hotel and lodging association and the tulsa lodging association. Hes also a former board member of the Tulsa Metro Chamber of commerce. Mr. Patel, we are grateful you can take the time away from running your businesses to talk with us this morning. We know that you and the other witnesses are very busy, so we appreciate all of your time. Welcome, and we look forward to your testimony. Thank you, mr. Hern. Were going to start with the witnesses here. So, ms. Ozer, you are now recognized for five minutes. Thank you. Thank you for inviting me and good morning everyone. My bank made nearly 2 billion with ppe loans serving 11,000 Small Businesses that were desperate. And lenders nationwide stepped up to implement this congressionally provided lifeline. We should applaud the countless Success Stories of businesses saved and employees retained. But it hasnt been easy. There were front end issues, especially with eligibility and lenders roles and simple nocost fixes are needed in any future program extension. We must learn from what didnt work. When it comes to forgiveness, significant concerns need to be addressed now. Piecemeal guidance continues to create confusion. There is still no guidance for major issues. And without answers, i cannot help my borrowers. We have no idea how a guarantee will be honored with a business is permanently close to file bankruptcy. We have no idea how were expected to service those loans long term. For borrowers requesting permission to sell to new owners, we have no idea how to help them. More importantly, borrowers are confused by the forgiveness process and panic that the loans they believed would be grants if they followed the rules may become burdensome debt because they cant muddle through the paperwork. Borrowers remain confused about the covered period and how to document payroll expenses. Theyre concerned about safe harbor calculations to help qualify for full forgiveness. I quote, i have tried and read many instructions regarding the forgiveness application, but i still find it very confuse. I have even listened to multiple webinars. I would love someone to be able to translate that for me, end quote. This borrowers not alone. Virtually all brorers share this concern. To add to tborrow this must be prescriptive or well wind up with another ez form which isnt making anything easier. Simplification will provide enormous e leaf. Congress must clarify the lenders role in the process. Identify a gai is a major problem. We would be conduits for delivering federal assistance because we had the network and capacity the federal government did not have. Other than providing the capital quickly, our role, as lenders, was to be limited. Only after we madal manies of loans did banks learn we would have to verify the accuracy and that forgiveness could hinge on this. We have gone from being a continue with it to being deeply involved in an ill defined process. At the heart of this issue is that the lenders role as defined by the agency creates an inherent conflict of interest. Lenders lend. We should not be the arbiter of who receives from the government especially when our decisions determine whether our own funds will be reimbursed. I urge you to clarify the lenders role in the process. I also encourage you to include a harmless section to better define lender responsibilities in verifying borrower provided documents and certifications. Lenders are on the front lines in delivering this crucial aid and we must fully understand our role to be comfortable helping our borrowers. Until the many issues are addressed, many lenders will be reluctant to embrace or expand a new program. Most agree we need to fully understand how the forgiveness process will work, how fda will honor guarantee, and what the guidance can say before we can consider participating in extensions. Otherwise, finally, a reminder that the best tool to assist americas Small Business long term in good times and bad has always been the regular 7a loans. We need the same temporary 7a enhancement provisions like c waivers and guaranteed percentages lifted that we make that have worked previously so well in tough times weve experienced before. They will work again. Supporting the 7a loan Program Means extending the section 1112 debt relief payments which are hugely stabilizing and have been for this existing portfolios and also encourage new lending. Funding remains for these 11, 12 payments, and i cannot think of a better tool to provide meaningful assistance to Small Business. Thank you so much, and i look forward to your questions. Thank you so much for your statement there, appreciate it. Were going to turn it over to ms. Bonfig now. Youre recognized for five minutes. Over to you. Good morning. Thank you for giving me the time to share my experience. My name is amy bonfig. Im the owner of Little Saints Academy, a licensed Child Care Center in st. Joseph, minnesota. Im honored to have been chosen to speak to the committee today on behalf of myself, our lender, and 30 fellow Child Care Centers in central minnesota. I have been working with the director of the minnesota Central Region sbdc to gather and share information as it becomes available. Our local sbdc office has been a vital resource for Little Saints Academy over the last ten years and on the cans navigating through this hardship with us. During the start of the pandemic, Child Care Centers were asked to remain open and care for essential workers children. With no guidance, we gathered together seeking information creating a safe space to ask questions, feel supported and make decisions as a group for the children we care for, our staff and our businesses. With little to no financial aid, suddenly the Paycheck Protection Program became available and i was grateful to receive a forgivable loan. Through this process, i have kept myself and our group aware of changes. I created a spreadsheet for the group because it was a very lengthy forgiveness application process. I met with them via zoom to help make sense of it when i could barely make sense of it myself. I spent much of my time over the days and several months focused on the success of our ppp loan and the forgiveness. It was incredibly time consuming. And at the end of our covered period, the forgiveness application finally appeared but with a new term, owneremployees, which was completely mind boggling because we had to be counted as fulltime equivalents on our loan application, and then we couldnt count ourselves in the fulltime equivalent count for safe harbor. Because of that, i was unable to spend my entire loan in eight weeks. Extending two weeks of the payroll, i can benefit from the entire loan. But we didnt find out about the extension option until we were in our eighth week and had exhausted most of our funds. After my cover period, i had no choice but to lay off staff. With the uncertainty of covid19 and the ability to stay open or even meet the fulltime equivalent safe harbor criteria, i was too afraid to choose the 24week option. Now the rules have changed again, but the sba is not giving my lender needed information to submit by application. Without forgiveness, the reality is i currently have an unforgiven loan that was used to pay my staff with benefits they should have been able to collect through the minnesota unemployment program. The child care directors and owners i bring with me today have expressed similar fear of failure regarding forgiveness. Many do not understand the rules, the application, and most do not have the luxury of time to sort it all out. With that being said, i want to steal a moment to advocate for the recognition of Small Business in the child care industry, especially after watching my brave and resilient colleague step up during this time of sheer uncertainty and chaos. Please understand that we need your support. We need peace of mind knowing that our loans have been forgiven as we look to the future Financial Stability of our programs. We run our daily businesses on tight budgets with our fingers crossed well make it the next day. Weve done this in the old normal and the new normal. We would like you to consider other expenses that may be relatable to forgiveness such as ppp, they are mrmometers, even professional cleaning services. Presenters bho dont qualify for the usda food program would help tremendously. I would like for you to consider making this a simpler process. The ez form needs many of the calculations in the long form to fill out the application honestly and accurately. Six unrelated to pull reports and gather required information from is way too complicated. Please do consider some degree of automatic forgiveness or at least a forgiveness process with fewer criteria. On behalf of my fellow child care providers, i thank you for allowing me to speak to you on behalf of our organization as we move forward with decisions about the ppp loan forgiveness. Thank you for sharing your experiences there. I want to turn it over to mr. Parker. Mr. Parker, youre now recognized for five minutes. Thank you. Chairman kim, Ranking Member hern, and members of the committee, thank you for the opportunity to speak about experiences about the Paycheck Protection Program. I own river view studios, a Video Production company in new jersey. Im a member of the main Street Alliance of new jersey, a network of Small Businesses in the garden state, and the chapter of the National Main Street Alliance. Earlier this yorear, i applied r ppp funds and received 11,200 through the program. Having used the funds by early summer, im waiting to begin the process of closing out the loan. Im hopeful 100 of the loan will be forgiven under the rule of the program. Im hopeful because i cant be sure and say for sure that will be the case as i and my Operations Manager are just beginning the process. We found much to be done to clarify the terms of forgiveness and the process to attain it. Its still unclear what the timeline is for beginning the process, the steps we need to take to complete it or the criteria we will be judged on the receive forgiveness. Documents we have received from our bank thus pfar have raised concerns that the entirety of the loan will be forgiven. For example, it looks like we will be requested to provide information about the mortgage expenses during this time and expenses related to other fixed costs like utility. Weve spent the entirety of the funds on payroll. The application leaves us it leaves us concerned that our spending on fixed costs will reduce a portion of what portion of the loan is forgiven. Were also concerned about the lack of clarity regarding any appeals process. What if we are requested to repay a portion of the loan but to believe that decision is made in error. Small Business Networks have experienced other road blocks in the forgiveness process. One bank has contracted out the forgiveness processing to a third party, but the website that this third party has built the process applications ma malfunctions to the point of uselessness. Another point of application is being questioned because her payroll falls on the 5th and 20th of the month rather than every two weeks. Several members have received notice from their banks a forgiveness process will be put on hold indefinitely because proposed legislation may change the rules regarding forgiveness. Other members, especially those in the restaurant industry, have express expressed concern they will misout on forgiveness because they will not be able to rehire staff to qualify for forgiveness because the business has though the been picked up sufficiently to necessitate their prepandemic work force. Our experiences illustrate a process that has thus far be opaque, arbitrary, and uneven with private lenders choosing how and when they will implement the forgiveness portion of the program. These risks make mistake in the design and rollout of the program itself which excluded vast portions of the Small Business sector, often the most vulnerable businesses, and has worsened economic inequality, especially by businesses owned by people of color. I count myself as one of the privileged businesses who received federal funds, and im grateful. Im also relatively confident that those same privileges will help me in the process to get them forgiven. I know that not every Small Business owner finds himself in this position. I know if it were left to me to sort the process out, i would be in far worse shape. Given the confusion surrounding the proes cess and shifting guidelines, this would level access to forgiveness and alleviate stress for Small Business and microBusiness Owners, particularly those with less access to support from their banks and accountants. Because most have exhausted their ppp, bewe believe the smartest plan to save the economy starts with grants, not loans, so we can cover payroll and keep people employed during the pandemic. This is an existential crisis in america. I believe its not trickle down but rather trickle up economics that fuels our economy. Putting funds in the hands of ordinary people puts money in the economy and keeps people working. Were taking the bold action this crisis requires. Thank you very much for your time and interest in main street Small Businesses. Thank you, mr. Parker, if your testimony. We appreciate that. Were going to now move over to mr. Patel. Good morning chairman, Ranking Member hern and members of the committee. It is an honor to speak before you today and thank you for my opportunity to share my story with you. My name is pete patel. I am a proud first generation american. My family and i emigrated in 1969 in search of the american dream. I am a member of the asianamerican hotel owners association, which represents 20,000 members who owned the path of all the hotels in the united states. My wife and i founded Promise Hotels in 2008. We own and operate Franchise Hotels in eastern oklahoma. During the past several years, our businesses have done well. Weve grown our operations and created and reacted to favorable economic conditions. Before the economic crisis caused by covid19, the lodging industry was enjoying record occupancies and profitability. Unfortunately, the coronavirus pandemic halted travel almost overnight. During our busy season, our hotels should have occupancies about 80 . Instead, weve been lucky to hit 20 in some weeks. Our revenues have fallen by 50 . Most tragically, we have had to lay off employees for the first time in my career because we simply dont have enough customers coming through our doors. At the on set of virus and as travel restrictions took on, hoteliers and spa businesses needed a lifeline. Were grateful congressional members came together so quickly to pass the c. A. R. E. S. Act. I appreciate how congress prioritized assistance to Small Businesses and our employees. We used the ppp predominantly towards utilities. The ppp did have a few draw backs, some of which could not be known at the time it was created, first the maximum lone amount only carried us a few months. We are now at the end of that period, and funds have been exhausted. Accordingly, we have reviewed the forgiveness process, and it has proven to be exceedingly complicated. From the time it was created, the guideline for forgiveness was often unclear and fluid. The complexity of the application portal for each business and time consuming and burdensome. I would like to note that the ppp funds have been crucial to the survival of our business. I understand theres discussion in congress about creating a second round of funding for Small Businesses that have suffered greatly because of the economic downturn. As the Hotel Industry has lost our busy season and are now facing our slowest time of year, i strongly urge you and your colleagues to quickly pass legislation that would authorize a second round of ppp to help us to save jobs and to save our and to keep our businesses open. At the beginning of the crisis, it would work to defer payment on principle and which for a few months. Largely, however, that forbearance has run out and banks are telling us that our notes will come due soon because of the pressure they feel from banking regulators on their debt. But there is a solution. The main Street Lending program was designed to help small and medium sized businesses survive the crisis by providing a critical bridge when they needed it the most. However, assetbased businesses have been excluded from participating in this program because of the underwriting methods employed by the federal reserve. Its Small Businesses like hotels that have suffered the most in this unreasonable standard. Earlier this week, secretary mnuchin, chairman powell, asserted conditions do not warrant expanding the main stream Lending Program to include hotels and other assetbased businesses. I urge the members of this committee to work with your colleagues to extend the program for businesses like our hotels. Chairman kim, Ranking Member hern, and members of the committee, i sincerely thank you for the opportunity to share my perspective on the outlook of the lodging industry in the united states. I am grateful for your leadership, and i look forward to solutions you propose to help the country during this unprecedented pandemic. Thank you so much. Thank you, mr. Patel. Appreciate your testimony here. Were going to move over into the question period. Ill start by recognizing myself for five minutes here. As i mentioned earlier, i spent the last i spent quite a bit of time Touching Base and visiting Small Businesses in my district as theyre facing these challenges. What ive heard from them is a message about what the future holds for Small Businesses and their employees. My focus here is that our economic recovery touches everyone, not just those at the top. And we need to make sure that the smallest businesses are being brought along in the postcovid19 recovery. The delivery of the ppp loans was a good first step, but i worry that the guidance could become burdensome to the Business Owners we have heard today. Getting that clear information on forgiveness is critical to the businesses. I wanted to start with ms. Ozer about what you described in great detail here. I wanted to pull out a few pieces here. As a seasoned sba 7a lender, can you evaluate the quality of the ppp loan forgiveness guidance you received from sba and treasury . And also can you also evaluate the user friendliness of the loan forgiveness application for the average Small Business borrower . I know you touched on some of this in your testimony, but i wanted to bring it out a little bit more. Thank you so much for your questions. Congressman kim, i do have 226 ppp loans in your district for over 48 million, so im quite familiar with the Third District in new jersey. That being said, to answer your question, and i know i did point this out in detail in my written. But the lack of guidance from the sba is something that i have never seen before in all my years dealing with the sba. Their guidance is usually very prescriptive and clear. This is not the case with the pp per ppp program. We certainly understand the speed at which they had to give out guidance. But its come piecemeal and its confusing. And if its confusing for the lender, that just translates to the borrowers. We cant help our borrowers if we ourselves dont understand the guidance. So, thats what has been my opinion one of the biggest problems. The application itself is burdensome. As you just heard so eloquently from your three witnesses, every single one of them can point out the problems in the application process. Again, i talked about the ez form which is not easy. Its just different. And it still requires the same amount of documentation. And i also talked about the problems in the ppp with the conflict of interest. It puts the lenders in a really bad position. Were unclear of our role. Are we when we jump into this with both feet because we absolutely wanted to support the communities that we lend in, our borrowers, our customers and the entire Small Business community because we are working through unprecedented times. But we were asked to be the conduit. We were not acting as lenders. We lend. But we were asked to simply pass on information and deliver funds through our network that the government couldnt do. And this was a problem. And now theyre asking us to verify information and verify certifications and documentation from the borrowers. That puts us in a very unusual position because we would love to see every borrower have forgiveness, and we would love to be reimbursed for all the money we put out on the street. But theres no clear guidance. Thank you for that. Mr. Parker, i wanted to turn to you. I understand, as you said, you have a Business Manager on staff whos helping you with the loan forgiveness application process. I also understand you have four employees on staff, a true microbusiness. I cant imagine without that support staff how this process would be for you. Can you expound on the value of having someone on the business side of things to help you navigate this ppp application process . And what impact has that had on your ability to focus on the revenuegenerating activities of your business, which is the producing documentaries and digital video . Thank you, yes. Ive been really fortunate to have access to a fulltime person whos pretty much seoul job is to take care of the financial aspects, to navigate the application process and all. But even she doesnt she has a hard time getting the information. I also have access to an accountant that i trust who is available to me. I am a producer of films. I am not an accountant. I was never trained in business. So, every minute that i spend doing things that are not related, bringing in producing a program is time taken away and reducing our income. So, its been invaluable to have access. Ive been very fortunate. I understand that many businesses do not have that same benefit that i have. I never could have done it alone. I would have had to forego the process. But its the amount that we did receive helped us immeasurably. It enabled us to keep penaople. And we were going into a very busy time at the time covid hit. So, i needed actually additional staff. And having these funds enabled us to maintain our business and to pivot and serve our customers. Were only able to do the work if our customers need us. So, were dependent on our customers being able to pay us as well. So, its a full circle. It certainly hits the challenges of staffing during these particular times, but also leading to focus bandwidth on these complicated issues. My time has expired, so im going to turn it over to the Ranking Member for five minutes. Mr. Patel, as you described in your testimony, the Hotel Industry is very unique. This means that your industry has faced very specific challenges during the emergency crisis that other industries may not have been confronting. Debt service. Can you talk more about the environment in your territory in oklahoma and the unique challenges that you face and your industry faces . Thank you, congressman hern. Yes, we are facing some deep challenges, primarily of just having funding. Most have seen revenue drops anywhere from 50 to in some cases 80 . Some are still closed in major metropolitan areas. We predict that a third of all of the hotels may see closure. And that is saddening to hear that an industry has done so well and its my livelihood thats the only live lihood i know could see closures. We need congress to step in to give us additional assistance. The pandemic is something that nobody asked for. And with regulations on closures and travel restrictions, we were probably the hardest hit industry out there. And so, again, without additional help, there will be a huge amount of closures. And then it will put our communities banks who have been very generous to us when we decided to grow and borrow money. Itll put them in a compromising position also. So, i think thats some of the things that we need to also keep in mind is its a trickle down. Other industries will be affected with what happens in the hospitality industry. Thank you so much mr. Patel. Ive listened to all the system very intently, read it all prior to the committee hearing. And i just want to say to each of you thank you for what youve done to survive and continuing to survive. And i know thats no way to run a business, as i mentioned being in the Small Business arena for so many years. You want to provide opportunities for your employees, for growth, promotion, and to expand your businesses w. That said, i know many of you know that there is roughly 135 billion of unused ppp money thats out there. If we could for the essence of time here, i would just like to get your thoughts on this. Would you just simple yes or no. Well move through. Would you support a second round of ppp loans, extension of the ppp loan duration, expansion of coverage for expenses for ppe and simplified forgiveness process . Mr. Patel, well start with you since were talking to you. Would you support that . Yes. Mr. Parker . Absolutely, yes, i think so so. I think its important. Ms. Bonfig . I would be grateful to be able to participate in it. Ms. Ozer . A conditional yes because until we fix the situation at hand, i think we would be lenders are a bit resonant to jump back into the pool because the existing program has quite a few flaws, and especially the forgiveness process. Were stuck in a place where we dont have clear directions. We need a simplifies process and procedure. We need defined lender roles. We need to strengthen the harm es p provision thats in there. We need a guide that takes 27 isrs and two rounds of faqs and put them into one document with clear guidance so we as lenders can help our borrowers. We jump in with two feet, but now were sort of stuck in the mud. And we need to get out and we want our borrowers to get out as well. I thank you for that. What i know having never been in politics before i became a member of Congress Less than two years ago is that Small Business and women in eric maamerica don two hoots about politics. They care about how to take care of their employees and businesses. I would encourage us all to work hard on getting hr8265 which does a lot of what ms. Ozer just said, to get it on the floor for passage. I think overwhelming majority would pass it and we can get the dollars out to folks like our witnesses. Mr. Chairman, i yield back. Thank you. Thank you, Ranking Member hern. Were going to turn it over to congressman schneider for your comments and questions here. Over to you for five minutes. Thank you, chairman kim. And i appreciate you hosting this important hearing. And i thank you as always, and the entire committee and the Committee Staff for navigating the difficult dynamics of congressional oversight during this unique time. Data demonstrates Paycheck Protection Program saved lives in illinois and around the countries. I represent the suburbs of chicago. Earlier this month we experienced a week of unseasonable cold temperatures and it was a wakeup call as local brewery owner noted it put everybody on notice. And what were going to do when its 30 degrees outside and can only operate at 25 capacity inside . As winter looms, the ppp funds have mostly been depleted. Meanwhile, covid is still coursing through our country and the pandemic is rah advantaging our economy. While the president and his administration plays down the crisis, Small Businesses are seeing the need to pass through. Its not enough they struggle with the economic challenges of the crisis, they have to deal cy down the crisis, Small Businesses are struggling to see the path through. Its not enough that these struggle with challenges of this crisis, they often now have to deal with the unnecessary complexity associated with determining the eligibility for ppp forgiveness. This is a real challenge, we will never get through this crisis until we beat back the virus. But meanwhile, we need to make sure that were providing relief to our Small Businesses, that they continue to operate and provide critical jobs within our community. We need to work to get to the recovery of these businesses so they can see their future and start to grow again, and ultimately most importantly. Get to a place where we can renew our come economy, this cannot happen without ongoing support. I am hopeful that we can work to find a path another elite package that will extend ppp and provide new resources for this business. As you look miss owes or as a lender you seen first down how businesses are trying to navigate through this forgiveness process. The cost and the complexity of that, do you have a sense of how many of your clients have had the contract from outside help, to get through the process of applying for this . Thank you for the question congressman. I do not have specific data on that, but anecdotally i can tell you that it runs the gamut. As one of our witnesses suggested, the businesses with the wherewithal have certainly contracted with outside vendors. We know just simply from the amount of questions that come into our call center, that all of the bars need outside help. The ones that need it the most, are the ones with the least amount of capital, go and hire outside help. So what do they do . They look to the banks, and that is problematic because we need to help them, and we dont have clear guidance. Thank you. And those Smaller Companies like i say, they dont have the resources, how are they applying for the forgiveness, or are they facing a situation where theyre going to be expected not to play back their loan . The ladder, unfortunately possibility. We as the lender, and they as the borrower, here time and time again in the media that theyre going to be extreme line forgiveness process. Which we are fully supportive of, this is not automatic, we know the government needs to make sure that they prevent against any kind of fraud and abuse. But a streamlined process for the lenders and the borrower to be able to help the smallest of borrower is ex essential. And thats what were looking for and honestly the amount of people that havent applied for loans is pretty high. Compared to those who cant, because they are all still hoping for the streamline forgiveness. Because they arent getting the answers from the lenders because the lenders dont have the answers to give them. So its a streamlined application is critical. And the last few seconds i have, thank you for sharing your story, trying to navigate the next few months with the services you provide the parents who are trying to get to work. How do you see the biggest challenge is looking ahead . I see is having positive cases, being a huge challenge. Continuing to charge the parents tuition. So that we stay afloat, some of them arent being paid, and theyre working at home but keeping their kids with us. We have a positive case, and we have contacted the Minnesota Department of health, and a College Student got to make the decision to close the stone. And that was very frustrating. We had just close one of our classrooms for over seven days, and it cost us about 1000 dollars. How do we make that up . So that challenge is real, i actually am part of a group that meets with the governments childrens cabinet. Weve talked extensively about having some sort of a program like unemployment, for child care. Or maybe just not just childcare, thats what were dealing with right now. We have some sort of an unemployment type bank, where we can call in and say hey we have been closed this classroom for seven days, this is the amount of income tuition that we have. And have some kind of help that we have the confidence to know its there. It was so helpful, and keep us honest. Thats one of the biggest things that i, fear is that parents are going to tell the truth about their kids being sick. Providers are going to be honest about sickness and their center, because theyre fearful of losing income. And thats probably just not in our industry, but thats my worry for us. I appreciate that, and i appreciate the time its just important that we have clarity simplicity. And have consistency in the application of these policies. I think the witnesses i yield back. Thank you for yielding back were gonna turn it over to congressman, over two for five minutes. Thank you very much mister chair. I sit here dumbfounded a Paycheck Protection Program, which has provided a lifeline to Small Businesses across this nation during this pandemic, has been shut down for 48 days now. With over 135 billion in funding, the ppp only shut down because of Speaker Pelosis unwillingness to bring meaningful legislation to the house for. The speaker would rather you Small Businesses as political pomp, rather than get things done. Hr 80 to 65, the legislation that Ranking Member should have it introduced and i have cosponsor, would reopen the ppp through the end of this year. On top of that, it would keep Small Businesses the ability to receive a second loan. It would provide more flexibility and how ppp dollars can be spent. And it would simplify the forgiveness process. So instead of working out legislation that could bring more than more relief to 30,000 Small Businesses across this great nation, nancy pelosi and democrat leadership has been focused on passing legislation that gives them cheap political talking points, for this election cycle. In fact, the speaker was so afraid that the ppp legislation would pass, she canceled session for today. She knew that her moderate members, and my good colleagues on the other side of the aisle, were going to sign that just charge petition. Which would force that bill to the floor, and help Small Businesses across this great nation, who are the engine of our economy. We cannot lose sight of the american Small Businesses, who are looking for us for Financial Relief in their most desperate hour. Which is why i signed that discharge petition this morning, and that calls for the immediate consideration of hr 8265. Hr 8265 partisanship should have no place in these halls during this pandemic and it is my hope that we vote on this important legislation soon. So with that being said, i want to turn my questions to mr. Patel. Mr. Patel, thank you for being here and for the sake of time, i simply want a yes or a no answer to the following questions. If you are okay with that. So mr. Patel, would it be helpful to Small Businesses to be able to apply for ppp loans through the end of 2020, as would be the case with hr 8265, was signed into law . Congressman, absolutely yes. Mr. Patel, would it be helpful to Small Businesses to have access to a second ppp loan, as would be the case of hr 8265 was signed into law . That would be great greatly needed for our industries and many of the industries. Yes. Mr. Patel would it be helpful to Small Businesses to have more flexibility and the eligible expansions for their ppp loans, census operation, expenditures, Property Damage costs and personal protective equipment . As would be the case if hr 8265 was signed into law . Yes. Mr. Patel, would be helpful to a Small Businesses to have a simplified forgiveness process . Especially for loans under 150,000 dollars, as would be the case if hr 8265 was signed into law . Yes. It would seem to me that the answer is simple, Speaker Pelosi needs to take swift action to help Small Businesses. Across this great nation. Rather than using legislation for cheap political bargaining chips, i request the demand Speaker Pelosi bring hr 8265 to the floor immediately. To help the Small Businesses across this great nation which still need our help. They are the engine of our economy, with that mister speaker, i yield back. Thank you appreciate it, want to turn over to congressman, you are now recognized for five minutes. Thank you chairman and Ranking Member for hosting me here today, i want to thank each of you for testifying. About your ppp process. As of august the 20th in my district alone, which has received ever seen and received 304 Million Dollars in ppp loans saving thousands of jobs. For many of the program has been a lifesaver, ive actually talked with so many sense so many of them since the launch of ppp. For one instance, specifically, has a Company Called bolder athletic wear, and manufacturers men womens athletic wear. The program is a life saver for his business because it was an easy application process, Quick Capital infusion to help make sure that he could retain his employees for the retail closures. One of his biggest concerns as he goes into the forgiveness process, is while the ppp funding has an impact, the business has still not fully recovered. As with the case with the vast majority of businesses around the country. His request has been for a second round of ppp funding, to help them as the economic recovery continues. My questions, you mentioned that this bank has approved the 11,000 dollars ppp loans of a total for almost two billion dollars. And youve already received notices from notices for many of your ppp borrowers, that i have either close their doors or filed for bankruptcy. So my question to you is, out of those 11,000 ppp loans that this bank has approved, do you have a specific figure, or do you have a sense one or the other, for how many notifications like this your institution has received . How many of these 11,000 businesses would you say, at this point today, have either close their doors or filed for bankruptcy . I do not have the exact figure, anecdotally ive spoken to at least five different businesses. That are planning to close, however, there are borrowers out there that we dont know about. So i cannot put a figure on it. The problem is that, without being able to have any direction on what to do with these loans, if a borrower does go out of business, or does declare bankruptcy, we question how we collective back guarantee from the fda, because theres no guidance on that. Your question about the exact numbers, i dont know. Weve had chat rooms with lenders all across the country who have been experiencing this, that businesses are closing and some of them are filing bankruptcy. But theres also businesses that are trying to sell. There is not enough guidance on what we should do for them if they have a ppp loan and they want to sell their business. They need to strike while the iron is hot. And theyre unable to sell their business because there is no guidance on how we should do that if they do have a ppp loan. So theres a lot of things that need to be fixed in this program. So that we can clearly help our borrowers. Thank you i appreciate that. I think your experience is consistent with my experience and many of the lenders ive spoken with. And certainly the small Business Owners ive spoken with, some of them who have not have been this accurate. Over decades of being some of them opened, some of them generational businesses, that they spend decades building. But a lot of sweat and tears, so i would also encourage as mr. Just said a moment ago, for leadership in the house to put aside some of the partisan issues. Lets put the interest of the american people, specifically our Small Businesses, lets figure out what we need to do to fix the problem with the lenders are having with these problems. I think in large part this legislation will fix those issues, but lets hear the concerns and the cries. Really a Small Businesses who are trying desperately to keep the businesses open and and with that with that, i yield i yield remainder my time. Remaining time. Thank, you congressman, for yielding back. I just had another question, and i just wanted to throw this out there to see if anyone else has any other members have any other questions, please let me now. I will start to wrap up. Miss bonfig, i wanted to revisit something that you had mentioned. As a borrower you are describing the complexity of the situation, the complexity of the easy form, and the time consuming aspect. Id like to see if you can give me a lot more of specificity about the complexity, or the easy form, and how it doesnt actually give you that much more leeway than the forms. I want to hear the senior own words, in your experience. Okay, i did the fullon form as soon as it came out. I started working on it. And i created a spreadsheet to help me get through it because i had so many sections, so many dates, and information that i needed to at their. And i couldnt just use current stats, i had to go back and pull ex stats staff that was no longer with me, and find all of their information. One for the current term, all their past terms, in the line form. What was exhausting. It was frustrating. When there is no easy way to pull that information. Quickly. So after having that done, i literally had just turned mine in, and the easy form came on. So that was frustrating in itself. But i started looking at the easy form, and the reality is, you still have to do almost all the work behind the scenes, they just changed to front page a little bit. So you still have to go back, and you still have to fill out the work she, and you have to fill it schedule a. Schedule a gives you six or seven little lying to put your staff in. What you have, and when you have 30 plus staff, you have to create your own spreadsheet. You have to do what you have to do to get the information together. But i wonder how many people put this information together and actually stepped into a business, and tried to actually apply for the forgiveness. Because i think if they had, theres a lot of this that is so confusing when you read it. And i dont consider myself a dumpers and. Well i dont consider myself a genius either. But this should be easy enough for me to understand the first time i read it. I shouldnt have to go back to it, over and over, and go i dont understand what that means. I dont understand what theyre asking for here. Its very, very confusing. I dont know how to help some of the people that have been trying to help, because if you read on the application, the full time equivalent reduction safe harbor one, if you just take 15 seconds and repeat through it. Okay we decided to have to go back and read, that it made no sense. And so, again, the owner employee aspect of it, when that came through, that was very frustrating. I have a partner who was on last year, but was an employee, and now it said that i can only use this much of eight weeks of what she made last year as an employer, owner employer, when she wasnt an owner. So eight weeks of zero still equals zero. In the same regard, i had a partner, who was not an employee last year, but is now both an employee and owner, he made zero last year, zero times eight weeks its still zero. So now i cant take any of their income, and there is no one answering these questions. I actually have a representative from the Small Business Development Center email a member of the fda and the response that we got back was, work it out with your landlord. So im sure that youre probably feeling most of those two. Working it its not an appropriate answer, coming from someone whos not in the program. Thank you, miss, and thank you all of this for your on is challenges and assessments of whats happening. Mr. Patel my district had a lot of short towns, tourism as big, a lot of hotels and hospitality that are struggling. So we know how difficult things have been, especially in her hometown, which is a Small Business town. They are trying to do everything they can to make the most out of this foreclosure. And we weigh what youve been talking to, its been incredibly helpful. Youve seen it across the board, you see this a no her level, so its helping to fill out some of the conversations here. I thank you again. As a father of a three year old, and a five year old, i know how tough it is for Childcare Centers and theyre just trying to do everything they can. Were trying to do this, right keep the kids safe, keep your family safe. And its a tough business, even in normal times. So i thank you for what you do there. I really appreciate that. For us, as congress is weighing solutions for these small dollar ppp borrowers, seeking forgiveness, we have to keep in mind that simplicity will be key for most Small Businesses. The single path factors that micro businesses do not have the attorneys, or the staff, to delay the challenges that many are facing. And they are unnecessary barriers to accessing the full loan in the forgiveness. Fda and the treasury have come together to provide as soon why abbreviated easy forgiveness application, but as you heard today, it is still not easy enough for the aboriginal Business Owners, and it theres a lot more that we can do. The agency should come together once again, and provide any easier application for the small borrowers. The vast majority of all ppp borrowers. The agencies insist on in this committee will come together in a barb partisan way as we have so often in the pass to craft a solution to these problems. I ask unanimous consent that as the members have five legislative days to submit statements, and supported material, for the record. And without objection, this is ordered. And if there is no further business for this committee, we are adjourned. Thank you so much for participating today. Weeknights this month were featuring American History tv programs as a preview of whats available every weekend on cspan 3. Tonight, a look at world war ii. 75 years ago, on september 2nd, 1945, government and military officials from the empire of japan signed surrender documents in a ceremony aboard the uss missouri in tokyo bay. Formally bringing the pacific war in the hostilities of world war ii to a close. The 75th World War Ii Commemoration Committee marked the Anniversary Awards the uss misery, now a memorial museum, docked at pearl harbor, in honolulu, hawaii. Watch tonight, beginning at 8 00 eastern. Enjoy American History tv, this week, and every weekend. On cspan 3. A House Financial Services subcommittee hearing on Companies Involved in vaccine development, and other Health Companies who received large government contracts because of the coronavirus pandemic. The subcommittee looked at how these companies were compensating their executives. The subcommittee will come to order, without objection we are asking. That the full committee, now the subcommittee, is authorized to participate in this hearing. Members are reminded to keep their video function at all time, even when they are not recognized by the chair. Members are reminded that they are responsible for muting and unmuting themselves. And to meet themselves
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