[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


                      A REVIEW OF PPP FORGIVENESS

=======================================================================

                                HEARING

                               BEFORE THE

        SUBCOMMITTEE ON ECONOMIC GROWTH, TAX, AND CAPITAL ACCESS

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                           SEPTEMBER 25, 2020

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 116-095
             Available via the GPO Website: www.govinfo.gov
             
                               __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
41-469 PDF                  WASHINGTON : 2021                     
          
--------------------------------------------------------------------------------------             
             
                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                         ABBY FINKENAUER, Iowa
                          JARED GOLDEN, Maine
                          ANDY KIM, New Jersey
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                         KWEISI MFUME, Maryland
                          JUDY CHU, California
                       DWIGHT EVANS, Pennsylvania
                        BRAD SCHNEIDER, Illinois
                      ADRIANO ESPAILLAT, New York
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                         ANGIE CRAIG, Minnesota
                   STEVE CHABOT, Ohio, Ranking Member
   AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                          TROY BALDERSON, Ohio
                          KEVIN HERN, Oklahoma
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        TIM BURCHETT, Tennessee
                          ROSS SPANO, Florida
                        JOHN JOYCE, Pennsylvania
                       DAN BISHOP, North Carolina

                 Melissa Jung, Majority Staff Director
   Justin Pelletier, Majority Deputy Staff Director and Chief Counsel
                   Kevin Fitzpatrick, Staff Director
                           
                           
                           C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Andy Kim....................................................     1
Hon. Kevin Hern..................................................     3

                               WITNESSES

Ms. Lynn G. Ozer, President, SBA Lending, Fulton Bank, Pottstown, 
  PA.............................................................     5
Ms. Amy Bonfig, Owner, Little Saints Academy, St. Joseph, MN.....     7
Mr. Jim Parker, CEO & Director, Riverview Studios, Bordentown, NJ     8
Mr. Pete Patel, President & Chief Executive Officer, Promise 
  Hotels, Tulsa, OK..............................................    10

                                APPENDIX

Prepared Statements:
    Ms. Lynn G. Ozer, President, SBA Lending, Fulton Bank, 
      Pottstown, PA..............................................    22
    Ms. Amy Bonfig, Owner, Little Saints Academy, St. Joseph, MN.    37
    Mr. Jim Parker, CEO & Director, Riverview Studios, 
      Bordentown, NJ.............................................    41
    Mr. Pete Patel, President & Chief Executive Officer, Promise 
      Hotels, Tulsa, OK..........................................    45
Questions and Answers for the Record:
    Questions from Hon. Sharice Davids to Ms. Lynn G. Ozer and 
      Responses from Ms. Lynn G. Ozer............................    48
    Questions from Hon. Sharice Davids to Ms. Amy Bonfig and 
      Responses from Ms. Amy Bonfig..............................    50
Additional Material for the Record:
    HOPE Testimony...............................................    52
    ICBA - Independent Community Bankers of America..............    55
    NAFCU - National Association of Federally-Insured Credit 
      Unions.....................................................    58

 
                      A REVIEW OF PPP FORGIVENESS

                              ----------                              


                       FRIDAY, SEPTEMBER 25, 2020

                  House of Representatives,
               Committee on Small Business,
                   Subcommittee on Economic Growth,
                                   Tax, and Capital Access,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 9:30 a.m., Room 
2360, Rayburn House Office Building. Hon. Andy Kim [chairman of 
the Committee] presiding.
    Present: Representatives Kim, Davids, Schneider, Delgado, 
Hern, Stauber, and Spano.
    Chairman KIM. Good morning. I call this hearing to order.
    I want to thank everyone for joining us this afternoon for 
this official hybrid hearing. I want to make sure to note some 
important requirements.
    Let me begin by saying that the standing House and 
Committee rules and practice will continue to apply during 
hybrid proceedings. All members are reminded that they are 
expected to adhere to these standing rules, including decorum.
    During the cover period as designated by the speaker, the 
Committee will operate in accordance with H. Res. 965 and the 
subsequent guidance from the Rules Committee in a manner that 
respects the rights of all members to participate. House 
regulations require members to be visible through a video 
connection throughout the proceeding, so please keep your 
cameras on.
    Also, please remember to remain muted until you are 
recognized to minimize background noise. If you have to 
participate in another proceeding, please exit this one and log 
back in later.
    In the event a member encounters technical issues that 
prevent them from being recognized for their questioning, I 
will move to the next available member of the same party and I 
will recognize that member at the next appropriate time slot 
provided they have returned to the proceeding.
    For those members physically present in the Committee room 
today, we will also be following the health and safety 
guidelines issued by the attending physician. That includes 
social distancing and especially the use of masks. I urge 
members and staff to wear masks at all times while in the 
hearing room, and I thank you in advance for your commitment to 
a safe environment for all here today.
    We are meeting today to conduct an important hearing on the 
Small Business Administration's Paycheck Protection Program 
(PPP), and specifically, a review of the loan forgiveness 
process.
    I want to thank each of the witnesses for their testimonies 
today. Over the past several months, this Committee has held 
numerous hearings on the PPP, and we have heard from borrowers 
and lenders about the challenges they have faced in accessing 
the program. I have also traveled across my district of 
Burlington and Ocean Counties in New Jersey to speak with 
business owners about how they fared through the pandemic, and 
I have heard some of the successes and challenges they face 
with the PPP and uncertainty about what the future holds.
    From borrowers who eventually did get access to loans, the 
Committee heard concerns about complicated, unclear, and 
sometimes 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 proceeds consistent with the law so that they 
could qualify for full loan forgiveness and effectively convert 
the loan into a grant which was the congressional intent in the 
CARES 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 for a large body of loans 
could have serious unintended negative consequences for 
borrowers and lenders who have developed business plans around 
full loan forgiveness.
    As early as June, SBA and Treasury recognized how 
challenging the initial loan 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 a streamlined application form for small 
dollar PPP borrowers have increased.
    In the meantime, lenders have remained limited in their 
ability to provide guidance to the borrowers leading to great 
anxiety and helplessness among borrowers who just want to do 
things the right way and need clear and simple rules from SBA 
and Treasury in order 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 as of September 8th, SBA had only received 
about 56,000 forgiveness decisions from lenders, representing 
just over 1 percent 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.
    I look forward to the discussion today and thank each of 
you again for taking the time to testify before us.
    I now yield to the Ranking Member, Mr. Hern, for his 
opening statement.
    Mr. HERN. Thank you, Mr. Chairman. And thank you for 
holding this very important and timely hearing.
    Small businesses across this Nation, from my state of 
Oklahoma to the Chairman's district in New Jersey, have been 
disproportionately devastated by COVID-19.
    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, the SBA and the Department of Treasury 
outlined rules and regulations so that lenders could start 
assisting 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 of PPP testified 
yesterday and presented important information to our Committee. 
Today's conversation will build on that hearing and will focus 
on the critical aspects of PPP loan forgiveness.
    As a small business owner for 35 years and the founder of a 
local 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 it is the same for all of my fellow 
Committee members, is to make this forgiveness process as 
simple and as 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, roadblocks 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 Chabot's H.R. 8265 that would improve and extend the 
popular program. More work needs to be done and that is why 
this hearing is paramount.
    It is unconscionable that we would continue to ignore our 
Nation's smallest firms that desperately need this assistance. 
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. 
It is important that we do. And we do not attack one another 
for political gain. And I am extremely disappointed that my 
colleagues would allow this testimony to be on the record.
    Truthfully, many of the problems that our witnesses will 
bring up today could easily be solved if the majority would 
allow Ranking Member Chabot's bill, H.R. 8265, 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 Jaime Herrera-Beutler earlier this 
morning.
    So, I urge my colleagues to take action to help the small 
businesses in each of their districts across the country by 
signing the discharge petition on the commonsense legislation, 
which they all support behind the scenes.
    I would also like to say that this is the second time that 
I have been disappointed by the majority's selection of a 
witness, and I hope that this is not a signal of what the 
Committee is becoming.
    Thank you, Mr. Chairman. I yield back.
    Chairman KIM. Thank you, Mr. Hern. I appreciate your 
comments.
    I would like to take a moment to explain how this hearing 
will proceed. Each witness will have 5 minutes to provide a 
statement, and each Committee member will have 5 minutes for 
questions. Please ensure that your microphone is on when you 
begin speaking and that you return to mute when finished.
    With that, I would like to introduce our witnesses before 
we begin.
    Our first witness today is Ms. Lynn Ozer. Ms. Ozer is 
president of the SBA Lending Department at Fulton Bank, a $20 
billion regional bank headquartered in Lancaster, Pennsylvania. 
She manages all of the SBA lending, which covers my home state 
of New Jersey, Pennsylvania, Maryland, Delaware, Virginia, 
Washington, D.C., and 249 office locations. She graduated 
magnum cum laude from Temple University where she earned a BBA 
degree majoring in accounting. Ms. Ozer served as the first 
female Chairwoman of the Board of Directors of the National 
Association of Government Guaranteed Lenders, and she is 
presently Co-Chair of the Technical Issues Committee while 
serving as an instructor for the association. Welcome, Ms. 
Ozer.
    Our second witness is Ms. Amy Bonfig. Ms. Bonfig is the 
owner of Little Saints Academy, a childcare center in Central 
Minnesota. When so few PPP borrowers have actually applied for 
loan forgiveness, Ms. Bonfig has not only completed the longer 
application form but has also started an informal network of 
fellow childcare centers in Minnesota to help them work through 
the forgiveness application process.
    Ms. Bonfig, we look forward to hearing your feedback on the 
loan forgiveness application process as a borrower and welcome 
you here today.
    Our third witness is Mr. Jim Parker, a small business owner 
from my district. He is the founder and owner of Riverview 
Studios and a 42-year veteran filmmaker. He has produced 
numerous broadcast programs for public television. 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 3rd 
Congressional District, Mr. Parker.
    I would now like to yield to the Ranking Member, Mr. Hern, 
to introduce our final witness.
    Mr. HERN. 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 of experience, Mr. Patel is a current 
board member of the Oklahoma Hotel and Lodging Association and 
the Tulsa Hotel Lodging Association. He is also a former board 
member of the Tulsa Metro Chamber of Commerce.
    Mr. Patel, we are grateful that 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.
    Chairman KIM. Thank you, Mr. Hern.
    We are going to start with the witnesses here. So Ms. Ozer, 
you are now recognized for 5 minutes and I am going to turn it 
over to you. Thank you.

  STATEMENTS OF LYNN G. OZER, PRESIDENT, SBA LENDING, FULTON 
BANK; AMY BONFIG, OWNER, LITTLE SAINTS ACADEMY; JIM PARKER, CEO 
  AND DIRECTOR, RIVERVIEW STUDIOS; PETE PATEL, PRESIDENT AND 
            CHIEF EXECUTIVE OFFICER, PROMISE HOTELS

                   STATEMENT OF LYNN G. OZER

    Ms. OZER. Thank you for inviting me, and good morning, 
everyone.
    My bank made nearly $2 billion of PPP 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 has not been easy.
    There were frontend issues, especially with eligibility and 
lenders' roles and simple no-cost fixes are needed in any 
future program extension. We must learn from what did not 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 guaranty will be honored when a business is permanently 
closed or files bankruptcy. If loans have a remaining balance 
after forgiveness, we have no idea how we are 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 burdensome 
forgiveness process and panic that the loans they believed 
would be grants if they followed the rules may become 
burdensome debt because they cannot muddle through the 
paperwork. Borrowers remain confused about the covered period 
and how to document payroll expenses, especially if they 
struggle with their local government's shifting requirements. 
They are concerned about safe-harbor calculations to help 
qualify for full forgiveness.
    One of our borrowers summarized her angst. I quote, ``I 
have tried and read many instructions regarding the forgiveness 
application but I still find it very confusing. I have even 
listened to multiple webinars. I would love someone to be able 
to translate that for me.''
    This borrower is not alone. Virtually all borrowers share 
this concern and so do lenders.
    To add to the confusion, borrowers and lenders see media 
reports that Congress will streamline forgiveness. Borrowers 
have delayed submitting applications hoping for that change. I 
urge quick authorization of a simplified forgiveness for 
smaller loans. This must be prescriptive or we will wind up 
with another EZ form which really is not making anything 
easier. Simplification would provide enormous relief.
    Congress must also prescriptively clarify the lender's role 
in the forgiveness process identified by GAO as a major 
problem. From the outset, lenders believed 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 made millions of loans did banks learn that 
we would have to verify the accuracy of the borrower's 
application and that forgiveness could hinge on this. We have 
gone from being a conduit to being deeply involved in an ill-
defined process.
    At the heart of this issue is that the lender role as 
defined by the agencies creates an inherent conflict of 
interest. Lenders lend. We should not be the arbiter of who 
receives forgiveness from the government, especially when our 
decisions determine whether our own funds will be reimbursed.
    To this end, I urge you to clarify the lender's role in the 
forgiveness process as part of any streamlined application for 
forgiveness. I also encourage you to include a strengthened 
hold harmless section to better define lender responsibilities 
in verifying borrower-provided documents and certifications.
    Lenders are on the frontlines 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 a new or expanded 
program. Most will agree that we need to fully understand how 
the forgiveness process will work, how SBA will honor its 
guarantees, and what the guidance still to come will say before 
we can even consider participating in new programs or 
extensions. Otherwise, we will not be able to give borrowers 
the help they are seeking and deserve.
    Finally, a reminder that the best tool to assist America's 
small business long term, in good times and bad, has always 
been the regular 7(a) loans. We need the same temporary 7(a) 
enhancement provisions like fee waivers and higher guaranty 
percentages that have worked previously so well in tough times 
we have experienced before. They will work again.
    Supporting the 7(a) Loan Program means extending the 
section 1112 debt relief payments which are hugely stabilizing 
and have been for the existing SBA portfolios and also 
encourage new lending. Funding remains for these 1112 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.
    Chairman KIM. Thank you so much for your statement there. 
Appreciate it.
    We are going to turn it over to Ms. Bonfig now, so you are 
recognized for 5 minutes. Over to you.

                    STATEMENT OF AMY BONFIG

    Ms. BONFIG. Good morning and thank you for giving me the 
time to share my experience with the PPP forgiveness 
application process.
    My name is Amy Bonfig. I am the owner of Little Saints 
Academy, a licensed childcare center in St. Joseph, Minnesota. 
I am honored to have been chosen to speak to your Committee 
today on behalf of myself, my lender, a local small business 
development center, and 30 fellow childcare centers in Central 
Minnesota.
    I have also been working with Barry Kirchoff, 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 
10 years and continues navigating through this hardship with 
us.
    During the start of the pandemic, childcare centers were 
asked to remain open and care for essential workers' children. 
With no guidance, our collaborative of childcare professionals 
joined 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 incredibly 
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, after funds were nearly exhausted, the forgiveness 
application finally appeared but with a new term, ``owner 
employees,'' which was completely mindboggling because we had 
to be counted as full-time equivalents on our loan application 
and then we could not count ourselves in the full-time 
equivalent count for Safe Harbor. Because of that I was unable 
to spend my entire loan in 8 weeks. Extending 2 weeks of the 
payroll, I can benefit from the entire loan but we did not find 
out about the 24-week extension option until we were in our 
eighth week and had exhausted most of our funds.
    After my covered period, I had no choice but to lay off 
staff. With the uncertainty of COVID-19 and the ability to stay 
open or even meet the full-time equivalent Safe Harbor 
criteria, I was too afraid to take the 24-week option. Now the 
rules have changed again but the SBA is not giving my lender 
needed information to submit my application.
    I do understand the concept and the intention of the 
program, but without forgiveness, the reality is I currently 
have an unforgiven loan that was used to pay my staff the 
benefits they really should have been able to collect through 
the Minnesota Unemployment Program.
    The childcare directors and owners that I bring with me 
today have expressed similar fear of failure regarding 
forgiveness. Many do not understand the complicated rules, the 
cryptic stipulations of 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 childcare 
industry, especially after watching my brave and resilient 
colleagues step up during this time of fear, 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 
that we will make it financially another day. We did this in 
the old normal and we are doing it in the new normal.
    We would like you to consider other expenses that may be 
relatable to forgiveness, such as PPE, thermometers, 
sanitizers, cleaning products, bleach, even professional 
cleaning services. For centers that do not qualify for the USDA 
food program, including the cost of feeding the children would 
even help tremendously.
    I would like for you to consider making this a simpler 
process. The EZ form still needs many of the calculations in 
the long form to fill out the application honestly and 
accurately. Six unrelated date ranges to pull reports and 
gather required information from is way too complicated. Please 
consider some degree of automatic forgiveness, or at least a 
forgiveness process with fewer criteria.
    On behalf of my fellow childcare providers, I thank you for 
allowing me to speak to you on behalf of our situation as you 
move forward with decisions about the PPP loan forgiveness.
    Chairman KIM. Thank you, Ms. Bonfig. Thank you for sharing 
your experiences there.
    I want to turn it over to Mr. Parker. Mr. Parker, you are 
now recognized for 5 minutes. Thank you.

                    STATEMENT OF JIM PARKER

    Mr. PARKER. Chairman Kim, Ranking Member Hern, and members 
of the Committee, thank you for the opportunity to speak to you 
about our experiences with the Paycheck Protection Program and 
the program's loan forgiveness process.
    My name is Jim Parker. I own Riverview Studios, a video 
production company in Bordentown, New Jersey. I am a member of 
the Executive Committee 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 year I applied for PPP funds and received 
$11,200 through the program. Having used the PPP funds by early 
summer, I am now waiting to begin the process of closing out 
the loan. In my case I am hopeful that 100 percent of the loan 
will be forgiven under the rules of the program.
    Now, I say hopeful because I cannot be sure and say for 
sure that that will be the case. As I and my operations manager 
are just beginning the process, we found that much could be 
done to clarify the terms of forgiveness and the process to 
obtain it.
    It is 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 to receive forgiveness.
    The documents we received from our bank thus far have also 
raised concerns about the likelihood that the entirety of the 
loan will be forgiven.
    For example, it looks like we will be requested to provide 
information about our mortgage expenses during this time and 
expenses related to other fixed costs, like utilities. We spent 
the entirety of the funds on payroll, so we expect the sum will 
be forgiven but the application is confusing and leaves us 
concerned that our spending on fixed costs will reduce a 
portion of what portion of the loan is forgiven.
    We are 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 that decision has been 
made in error? Small business owners in our network in New 
Jersey and nationwide have experienced other roadblocks in the 
forgiveness process. One member's bank has contracted out the 
forgiveness processing to a third party but the website that 
this third party has built the process applications now 
functions to the point of uselessness. Another member has 
reported that their application using the alternative dates 
option is being questioned because her payroll falls on the 5th 
and 20th of the month rather than every 2 weeks.
    Several members have received notice from their banks that 
the forgiveness process will be put on hold indefinitely 
because proposed legislation may change the rules regarding 
forgiveness and other Main Street Alliance members, especially 
those in the restaurant industry have expressed concern that 
they will miss out on forgiveness because they have not been 
able to rehire staff at the necessary level to qualify for 
forgiveness because the business has not picked up sufficiently 
to necessitate their pre-pandemic workforce.
    Our experiences illustrate a process that has thus far been 
opaque, arbitrary, and uneven with private lenders choosing how 
and when they will implement the forgiveness portion of the 
program. This risks repeating the mistakes made in the design 
and rollout of the program itself which excluded vast portions 
of the small business sector, often the most vulnerable 
businesses and it has worsened economic inequality especially 
for businesses owned by people of color.
    I count myself as one of the privileged businesses who 
received Federal funds, and I am grateful. I am also relatively 
competent that those same privileges that helped me access 
these funds would help me in the process to get them forgiven.
    I know that not every small business owner finds himself in 
this position. Many are going into the process themselves 
without the help of an expert staff member. I know if it were 
left to me to sort this process out I would be in far worse 
shape.
    For these reasons, Main Street Alliance supports 
legislation that would provide automatic forgiveness for loans 
under $150,000. Given the confusion surrounding the process and 
shifting guidelines, this would level access to forgiveness and 
alleviate stress for many small business and microbusiness 
owners, particularly those with less access and support from 
their banks and accountants. And because most businesses have 
now exhausted their PPP, we believe the smartest plan to save 
our small business economy starts with grants, not loans, so we 
can cover payroll and keep people employed through the 
pandemic.
    This is an existential crisis for small businesses in 
America. I believe it is not trickle-down but rather trickle-up 
economics that fuels our economy. Putting funds in the hands of 
ordinary people puts money back into the economy and keeps 
America working. We are counting on our leaders to take the 
bold action that this crisis requires.
    Thank you very much for your time and interest in Main 
Street small businesses.
    Chairman KIM. Thank you, Mr. Parker, for your testimony. I 
appreciate that.
    We are going to now move over to Mr. Patel. Mr. Patel, over 
to you for 5 minutes.

                    STATEMENT OF PETE PATEL

    Mr. PATEL. Good morning, Chairman Kim, Ranking Member Hern, 
and members of the Committee. It is an honor to speak before 
you today and thank you for the opportunity to share my story 
with you.
    My name is Pete Patel. I am a proud first-generation 
American. My family and I immigrated to the United States from 
India in 1979 in search of the American Dream. We found it in 
Tulsa, Oklahoma, as hoteliers and small business owners. I am 
also a member of the Asian-American Hotel Owners Association 
which represents 20,000 members who own almost half of all the 
hotels in the United States.
    My wife tina 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. We have 
grown our operations and created and reacted to favorable 
economic conditions.
    Before the economic crisis caused by COVID-19, 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 at about 80 percent. Instead, we have been lucky to 
hit 20 percent in some weeks. Our revenues have fallen by 50 
percent. Tragically, we have had to lay off employees for the 
first time in my career because we simply do not have enough 
customers coming through our doors.
    At the onset of the virus and as travel restrictions took 
hold, hoteliers and small businesses needed a lifeline. We are 
grateful that congressional leaders came together so quickly to 
pass the CARES Act. In particular, I appreciate how Congress 
prioritized assistance to small businesses and our employees. 
We used the PPP predominately towards payroll and utilities.
    The PPP did have a few drawbacks, some of which could not 
have been known at the time it was created. First, the maximum 
loan amount of 2.5 times monthly payroll only carried us for 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 that 
PPP was created, the guidelines for forgiveness was often 
unclear and fluid. The complexity of the forgiveness 
application port of each business is also quite time-consuming 
and burdensome.
    I would also like to note that the PPP funds have been 
crucial to the survival of our business. I understand there is 
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 keep our 
businesses open.
    At the beginning of the crisis, our banks would work with 
us to defer payment on principal and interest 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 there from banking regulations.
    The Main Street lending program was designed to help small 
and medium-sized businesses survive their crisis by providing a 
critical bridge when they needed it the most. However, asset-
based businesses have been excluded from participating in this 
program because of the underwriting methods employed by the 
Federal Reserve. It is small businesses like hotels that have 
suffered the most in this unreasonable standard.
    Earlier this week, Secretary Mnuchin and Chairman Powell 
asserted that conditions do not warrant expanding the Main 
Street Lending Program to include hotels and other asset-based 
businesses. I urge the members of this Committee to work with 
your colleagues to expand the Main Street Lending Program for 
asset-based businesses like our hotels.
    Chairman Kim, Ranking Member Hern, and members of the 
Committee, I sincerely thank you for giving me the opportunity 
to share my perspective on the outlook of the lodging industry 
in the United States. I am grateful for your leadership and 
look forward to solutions you propose to help the country 
during this unprecedented pandemic.
    Thank you so much.
    Chairman KIM. Thank you, Mr. Patel. I appreciate your 
testimony here.
    We are going to move over into the question period, and I 
will start by recognizing myself for 5 minutes here.
    As I mentioned earlier, I have spent quite a bit of time 
touching base and visiting a lot of small businesses in my 
district as they are facing these challenges. And what I have 
consistently heard from them is a message about unease 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 post COVID-
19 recovery. The delivery of the PPP loans was a good first 
step, but I worry that the complicated piecemeal guidance of 
the loan forgiveness could become burdensome for the business 
owners that we have heard today.
    Getting that clear information of forgiveness is critical 
to the businesses, and I wanted to start with Ms. Ozer about 
what you described because you described it sort of in great 
detail here and I just wanted to kind of pull out a few pieces 
here.
    As a seasoned SBA 7(a) lender, can you evaluate the quality 
of the PPP loan forgiveness guidance you have 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 just want to kind of bring it out 
a little bit more here.
    Ms. OZER. Thank you so much for your question. And 
Congressman Kim, I do have 226 PPP loans in your district for 
over $48 million. So I am quite familiar with the 3rd 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 PPP program. We certainly understand the speed at which 
they had to give out guidance but it has come piecemeal and it 
is confusing. And if it is confusing for the lenders, that just 
translates to the borrowers. We cannot help our borrowers if we 
ourselves do not understand the guidance. So that is what has 
been in 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. It is 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. We are unclear of our role. You know, when we 
jumped 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 could not do. And this 
was a problem. And now they are 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 that we have put out on the 
street. But there is no clear guidance.
    Chairman KIM. Thank you for that.
    Mr. Parker, I want to turn to you. I understand you said 
you have a business manager on staff who is helping you with 
the loan forgiveness application process. I also understand you 
have four employees on staff, a true microbusiness. I cannot 
imagine that without that support staff, you know, how this 
process would be for you. So can you expand on the value of 
having someone on your staff with expertise 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 revenue generating activities of your business which is 
producing documentaries and digital video?
    Mr. PARKER. Thank you. Yes.
    I have been really fortunate to have access to a full-time 
person whose pretty much sole job is to take care of the 
financial aspects, to navigate the application process and all. 
But even 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 to producing a program is time 
taken away from reducing our income.
    So it has been invaluable to have access. I have 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 forgo the process but the amount that we did 
receive helped us immeasurably. It enabled us to keep people 
on, 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 to 
serve our customers. We are only able to do the work if our 
customers need us. And so we are dependent on our customers 
being able to pay us as well. So it is a full circle.
    Chairman KIM. Well, it certainly hits the challenges of 
staffing during these particular times but also needing to 
focus bandwidth on these complicated issues.
    My time has expired so I am going to turn it over to the 
Ranking Member. Mr. Hern, you are now recognized for 5 minutes.
    Mr. HERN. Thank you, Mr. Chairman.
    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. It comes from 
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?
    Mr. PATEL. Thank you, Congressman Hern.
    Yes. We are facing some deep challenges, primarily of just 
having funding to continue with operations. Most hotels 
throughout the country have seen revenue drops anywhere from 50 
percent to in some cases 80 percent. 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 that 
has done so well and is my livelihood, that is the only 
livelihood I know, could see closures. We need Congress to step 
in to give us some 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 community banks who have 
been very generous to us when we decided to grow and lend more 
money, it will put them in a compromising position also. So I 
think that is some of the things that we need to also keep in 
mind is it is a trickle down. Other industries will be affected 
with what happens in the hospitality industry.
    Mr. HERN. Thank you so much, Mr. Patel.
    I have listened to all the testimony very intently, read it 
all prior to the Committee hearing, and I just want to say to 
each of you, thank you for what you have done to survive and 
continuing to survive. I know that is no way to run a business. 
As I mentioned being in the small business arena for so many 
years, you really want to provide opportunities for your 
employees, opportunities for growth, promotion, and also to 
expand your businesses.
    With that said, I know many of you know that there is 
roughly $135 billion of unused PPP money that is out there, and 
if we could, for the essence of time here, I would just like to 
get your thoughts on this. Just a simple yes or no, we will 
move through. Would you support a second round of PPP loans, 
extension of the PPP duration, expansion of covered PPP 
expenses for PPE, and a simplified forgiveness process?
    Mr. Patel, we will just start with you since we are talking 
already. Would you support that?
    Mr. PATEL. Yes.
    Mr. HERN. Mr. Parker?
    Mr. PARKER. Absolutely. Yes, I think so. I think it is 
important.
    Mr. HERN. Ms. Bonfig?
    Ms. BONFIG. I would be grateful to be able to participate 
in it again.
    Mr. HERN. Ms. Ozer?
    Ms. OZER. Conditional, yes, because until we fix the 
situation at hand I think lenders are a bit reticent to jump 
back into the pool because the existing program has quite a few 
flaws and especially the forgiveness process. We are stuck in a 
place where we do not have clear directions. We need a 
simplified process and procedure. We need to define lender 
roles. We need hold harmless for lenders. We need to strengthen 
the hold harmless provision that is in there. We need a guide 
that takes 27 IFRs and two rounds of FAQs and puts them into 
one document with clear guidance so we as lenders can help our 
borrowers. We jump in with two feet but now we are sort of 
stuck in the mud and we need to get out and we want our 
borrowers to get out as well.
    Mr. HERN. Well, I thank you for that. And what I know, 
again, having never been in politics before I became a member 
of Congress less than 2 years ago, is that small business-men 
and women in America do not care two hoots about politics. They 
just want to figure out how again they can take care of their 
employees, their customers, and grow their business. And I 
would encourage us all to work hard on getting H.R. 8265, which 
does a lot of what Ms. Ozer just said, to get it on the floor 
for passage. I think it would be an overwhelming majority that 
would pass it and we can get these other $135 billion out to 
folks like our witnesses.
    Mr. Chairman, I yield back. Thank you.
    Chairman KIM. Thank you, Ranking Member Hern.
    We are going to turn it over to Congressman Schneider for 
your comments and questions here. It will be you for 5 minutes.
    Mr. SCHNEIDER. 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 from the Small Business Administration demonstrates 
that the Paycheck Protection Program helped save more than 
90,000 jobs in my district alone. It was a crucial lifeline to 
thousands of small businesses in Illinois and around the 
country.
    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 of what we are going to do when it is 30 degrees outside 
and can only operate at 25 percent capacity inside.
    As winter looms, the PPP funds have now been mostly 
depleted. Meanwhile, COVID is still coursing through our 
country and the pandemic is ravaging our economy. While the 
President and his administration continue to play down the 
crisis, small businesses are struggling to see the path 
through.
    It is not enough that they struggle with the economic 
challenges of this crisis; they also now have to deal with the 
unnecessary complexity associated with determining their 
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 we are 
providing relief to our small businesses so that it can 
continue to operate and provide critical jobs within our 
community.
    We need to work to get to the recovery where these 
businesses can see their future and start to grow again. And 
ultimately, most importantly, get to a place where we knew our 
economy.
    But this cannot happen without ongoing support. So as 
others have noted, I am hopeful that we can work to find a path 
to another elite package that will extend PPP and provide new 
resources for these businesses.
    But as we look at the current situation, if I can turn to 
Ms. Ozer, as a lender, you have seen firsthand how businesses 
are trying to navigate through this forgiveness process, the 
cost of the complexity for that. Do you have a sense of how 
many of your clients have had to contract with outside help to 
get them through the process of applying for forgiveness?
    Ms. OZER. 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 borrowers need outside help. The ones that need it the most 
are the ones with the least amount of capital to go and hire 
outside help. So what do they do? They look to the bank. And 
that is problematic because we need to help them and we do not 
have clear guidance.
    Mr. SCHNEIDER. Thank you. And then the smallest of 
companies that do not have the resources, how are they applying 
for the forgiveness? Or are they facing a situation where they 
are just going to be stuck having to pay back the loan?
    Ms. OZER. Well, the latter is an unfortunate possibility. 
But, we as the lender have, and they, as the borrower hear time 
and time again in the media that there is going to be a 
streamlined 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 borrowers to be 
able to help the smallest of borrowers is essential. And that 
is what we are looking for. And honestly, the amount of people 
that have not applied for loan forgiveness is pretty high 
compared to those who can because they are all still hoping for 
the streamline forgiveness because they are not getting the 
answers from the lenders because the lenders do not have the 
answers to give them. So a streamlined application is critical.
    Mr. SCHNEIDER. Okay. Thank you.
    In the last few seconds I had, if I can turn to Ms. Bonfig 
and thank you for sharing your story. You are trying to figure 
out how to navigate the next few months but the services you 
provide to parents who are trying to get back to work are also 
critical. Or do you see the biggest challenges looking at----
    Ms. BONFIG. I see us having positive cases being a huge 
challenge and continuing to charge the parents tuition so that 
we stay afloat. Some of them are not being paid and they are 
working at home but keeping their kiddos with us. We had a 
positive case and we had to contact the Minnesota Department of 
Health and a college student working for the Department of 
Health got to make the decision to close us down. And that was 
very frustrating. We had to close one of our classrooms for 
over 7 days and it cost us about $8,000 but, you know, how do 
we make that up?
    Mr. SCHNEIDER. So that challenge is real.
    Ms. BONFIG. I actually am part of a group that meets with 
the Governor's Children's Cabinet in Minnesota. And we have 
talked extensively about having some sort of a program like 
unemployment for childcare, and maybe it is not the childcare 
but that is who we are dealing with right now. That maybe we 
have some sort of an unemployment-type bank where we can call 
in and say, okay, we had to close this classroom for 7 days. 
This is the amount of income, tuition that we had to forgo, and 
have some kind of help that we have the confidence to know it 
is there. It would be so helpful to a lot of us. And keep us 
honest. That is one of the biggest things that I fear is that 
parents are not going to tell the truth about their kids being 
sick. Providers are not going to be honest about sickness in 
their center because they are fearful of losing income. And 
that is probably not just in our industry but that is my worry 
for us.
    Mr. SCHNEIDER. No, I appreciate that. And I am over time so 
I appreciate the time. It is just important that we have 
clarity, that we have simplicity, and we have consistency in 
the application of these policies.
    So I thank the witnesses. I yield back the balance of my 
time.
    Chairman KIM. Thank you for yielding back.
    We are going to turn it over to Congressman Stauber. Over 
to you for 5 minutes.
    Mr. STAUBER. Well, thank you very much, Mr. Chair.
    You know, I sit here dumfounded. The 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 is only 
shut down because of speaker Pelosi's unwillingness to bring 
meaningful legislation to the House floor. The speaker would 
rather use small businesses as political pawns rather than get 
things done.
    H.R. 8265, the legislation that Ranking Member Chabot 
introduced and I have cosponsored, would reopen the PPP through 
the end of this year. On top of that, it would give small 
businesses the ability to receive a second loan. It would 
provide more flexibility in how PPP dollars can be spent, and 
it would simplify the forgiveness process.
    So instead of working on legislation that would bring more 
relief to 30 million small businesses across this great Nation, 
Nancy Pelosi and democrat leadership have 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 a 
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 discharge petition which would force that bill to the 
floor and help small businesses across this great Nation who 
are the engine of our economy. And we cannot lose sight of the 
American small businesses who are looking to 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 H.R. 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 if H.R. 8265 was signed into law?
    Mr. PATEL. Congressman, absolutely, yes.
    Mr. STAUBER. Okay. Mr. Patel, would it be helpful to small 
businesses to have access to a second PPP loan as would be the 
case if H.R. 8265 was signed into law?
    Mr. PATEL. That would be greatly needed for our industries 
and many other industries. Yes.
    Mr. STAUBER. Mr. Patel, would it be helpful to small 
businesses to have more flexibility in the eligible expenses 
for their PPP loan such as operation expenditures, property 
damage costs, and personal protective equipment as would be the 
case if H.R. 8265 was signed into law?
    Mr. PATEL. Yes.
    Mr. STAUBER. Mr. Patel, would it be helpful to small 
businesses to have a simplified forgiveness process especially 
for loans under $150,000 as would be the case if H.R. 8265 was 
signed into law?
    Mr. PATEL. Yes.
    Mr. STAUBER. You know, 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 and 
demand Speaker Pelosi bring H.R. 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. And 
with that, Mr. Speaker, I yield back.
    Chairman KIM. Thank you. Appreciate it.
    I want to turn it over to Congressman Spano. You are now 
recognized for 5 minutes.
    Mr. SPANO. Thank you, Chairman Kim and Ranking Member Hern 
for hosting the hearing today. I want to thank each of you for 
testifying about your experience with the PPP forgiveness 
process.
    As of August 20th, in my district alone, which is the 15th 
District of Florida, Central Florida, 10,254 businesses have 
received $304 million in PPP loans saving tens of thousands in 
jobs. For many, the program has been a lifesaver. I have 
actually talked with so many of them since the launch of PPP. 
One, for instance, Mr. Powell I can think of specifically, he 
owns a company called Boulder Athleticwear in Plant City and 
they manufacture women's athleticwear. The program was a 
lifesaver for his business because it was an easy application 
process that provided a quick capital infusion to help make 
sure that he could retain his employees through the retail 
closures. One of Mr. Powell's biggest concerns as he goes into 
the forgiveness process is that while the PPP funding made a 
significant impact, the business has still not fully recovered 
as is the case with the vast majority of businesses across the 
country. His biggest request has been for a second round of PPP 
funding to help him as the economic recovery continues.
    My question is for Ms. Ozer. You mentioned that Fulton Bank 
has approved nearly 11,000 PPP loans for a total of almost $2 
billion and that you have already received the notices from 
many of your PPP borrowers that have either closed their doors 
or filed for bankruptcy. And so my question to you is out of 
those 11,000 semi PPP loans that Fulton 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? So how many of these 11,000 businesses would you 
say at this point today have either closed their doors or filed 
for bankruptcy?
    Ms. OZER. I do not have the exact figures. Anecdotally I 
have spoken to at least five different businesses that are 
planning to close. However, there are borrowers out there that 
we do not know about, and 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 collect 
the guarantee from the SBA because there is no guidance on 
that.
    Your question about the exact numbers, I do not know. I 
mean, we have had chatrooms with lenders all across the country 
who have been experiencing this that businesses are closing and 
some of them are filing bankruptcy but there are also 
businesses that are trying to sell and 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 they are unable to sell their business 
because there is no guidance on how we should do that if they 
do have a PPP loan.
    So there are a lot of things that need to be fixed in this 
program so that we can clearly help our borrowers.
    Mr. SPANO. Thank you, Ms. Ozer. I appreciate that. And I 
think your experience is consistent with my experience and many 
of the lenders that I have spoken with, and certainly the small 
business owners I have spoken with, some of whom have gone out 
of business after literally decades of being open, some of them 
generational businesses, that they spent literally decades 
building and have put a lot of blood, sweat, and tears. So I 
would also encourage as Mr. Stauber just said a moment ago for 
leadership in the House to put aside some of the partisan 
issues particularly as we lead up to the election here, let's 
put the interest of the American people, specifically our small 
businesses, let's figure out what we need to do to fix the 
problems that the lenders are having in getting confirmation on 
what to do to get these loans forgiven. And I think in large 
part this legislation would fix those issues. But let's hear 
the concerns and the cries really of small businesses who are 
trying desperately to keep their businesses open.
    And with that I yield the remainder of my time.
    Chairman KIM. Thank you, Congressman, for yielding back.
    I just have another question or two and just wanted to 
throw this out there, and if anyone else has any or any other 
members have any further questions, please let me know and we 
can do that, otherwise, we can start to wrap up.
    Ms. Bonfig, I want to kind of revisit something that you 
had mentioned. As a borrower, you know, you were describing the 
complexity of that situation, the complexity of the EZ Form and 
the others and the time-consuming aspects of that. And I would 
like to just see if you could give me a little bit more 
specificity about what you are saying about the complexity even 
though the EZ Form and how it does not actually give you that 
much more leeway than sort of the EZ form. I just want to kind 
of hear this in your own words from your experience.
    Ms. BONFIG. Okay. I did the full long form. As soon as it 
came out I started working on it and I created a spreadsheet to 
help me through it because I had so many different sections, so 
many dates and information that I needed to add in there and I 
could not just use current staff. I have to go back and pull X 
staff, staff that was no longer with me and find out their 
information. For the current term, all the terms that were 
asked for in the long form. It was exhausting. It was 
frustrating. There is no easy way to pull the information 
quickly.
    So after having that done, I literally had just turned mine 
in and the EZ form came out. So that was frustrating in itself 
but I started looking at the EZ form and the reality is you 
still have to do almost all the work behind the scenes. They 
just changed the front page a little bit. So you still have to 
go back and you have to fill out the worksheet. You have to 
fill out Schedule A. Schedule A gives you six or seven little 
lines to put your staff in. And I am not wrong. When you have 
30-plus staff, you have to create your own spreadsheet. I mean, 
you have to, you know, you have to do what you have to do to 
get the information together. But I wonder how many people who 
put this information together actually step into a business and 
try to actually apply for the forgiveness because I think if 
they had there is a lot of this that is so confusing when you 
read it. And I do not consider myself a dumb person. I do not 
consider myself a genius either, but this should be easy enough 
for me to understand the first time I read it. I should not 
have to go back to it over and over and over again and go I do 
not understand what that means. I do not understand what they 
are asking for here. It is very, very confusing.
    I do not know how to help some of the people I am 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 read through it, you know, okay, wait a second. I 
have got to go back and read that again because that made no 
sense. And so, and again, the owner-employee aspect of all of 
it, when that came through that was very frustrating because I 
have a partner who was not an owner last year but was an 
employee and now it said that I can only use this much of 8 
weeks of what she made last year as an owner-employee. Well, 
she was not an owner so 8 weeks of zero still equals zero.
    In the same regard, I have a partner who was not an 
employee last year but is now both an employee-owner. He made 
zero last year. Zero times 8 weeks is still zero. So now I 
cannot count any of their income. And there is nobody answering 
these questions.
    I actually had our representative from the Small Business 
Development Center email a member of the SBA and the response 
that we got back was ``work it out with your lender.'' So Lynn, 
I am sure that you are probably feeling those things, too. 
``Work it out with your lender'' is not an appropriate answer 
to come from the SBA who is running the program.
    Chairman KIM. Thank you, Ms. Bonfig. And thank you, all of 
you, for just your honest challenges and assessments of what is 
happening here.
    Mr. Patel, my district has a lot of shore towns, a lot of 
tourism aspects, a lot of hotels and hospitality that are 
struggling. Mr. Parker is from my district. He knows how 
difficult things have done throughout there, especially in our 
hometown there in Bordentown, which is a small business town 
and, you know, folks are trying to do everything they can to 
try to make that work.
    Ms. Ozer, the way in which you have been talking through 
this has been incredibly helpful, really just giving us some 
sense what you are seeing because you are seeing across the 
board. You have seen this on a macro level which is really just 
helping fill out some of the conversations here that we have 
had.
    Ms. Bonfig, you know, thank you again. As a father of a 3-
year-old and a 5-year-old, I know how tough it is for childcare 
centers and you are trying to do everything that you can to try 
to do this right, keep the kids safe, you know, keep our 
families safe. It is a tough business even in normal times. So 
thank you for what you are doing there. I really appreciate 
that.
    For us, as Congress is weighing solutions for these small 
dollar PPP borrowers seeking forgiveness, you know, we have to 
keep in mind that simplicity will be key for most small 
businesses here. The simple fact is that these firms that study 
the microbusinesses do not have accountants or attorneys on 
staff as we have heard today the challenges that many of you 
are facing and would therefore face additional and unnecessary 
barriers to accessing full loan forgiveness.
    SBA and Treasury have come together before to provide a 
somewhat abbreviated EZ forgiveness application, but as we just 
heard today it is still not easy enough for the average small 
business owner. There is still a lot more that we have to do. 
Agencies should come together once again and provide a 
streamlined loan forgiveness application for small dollar 
borrowers who represent the vast majority of all PPP borrowers. 
If the agencies insist on the status quo, I am sure the members 
of Congress on this Committee will work together in a 
bipartisan way as we have so often in the past to craft a 
solution to these problems.
    I ask unanimous consent that members have 5 legislative 
days to submit statements and supporting material for the 
record.
    And without objection, so ordered.
    And if there is no further business before the Committee, 
we are adjourned. Thank you so much for participating today.
    [Whereupon, at 10:39 a.m., the subcommittee was adjourned.]
    [Mr. Jim Parker did not submit his Responses to QFR's in a 
timely manner.]
    [Mr. Pete Patel did not submit his Responses to QFR's in a 
timely manner.]
                            
                            A P P E N D I X

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                                 [all]