ASTA has officially asked the Small Business Administration to modify the Paycheck Protection Program, increasing its forgiveness provisions and increasing the loan terms, among several other requests.
The Society sent its proposed modifications in a letter on Friday to SBA administrator Jovita Carranza. The PPP was introduced earlier this year under the Coronavirus Aid, Relief and Economic Security Act.
"While the program has provided a critical financial lifeline to those of our member companies who have successfully been able to apply since its launch on April 3, shortcomings associated with the initial rollout suggest the need for improvements," ASTA said in its letter.
The PPP is designed for small businesses (500 or fewer employees), independent contractors and the self-employed to apply for a low-interest, forgivable loan, up to $10 million.
ASTA is asking for five changes to the program:
- Increase its forgiveness provisions from eight to at least 12 weeks (as of now, the loans are designed to help small businesses pay up to eight weeks of payroll costs, including benefits), and let the borrower begin that time period at their discretion instead of the date the loan is made.
- Increase loan terms to at least five years. Currently, the loan must be paid back within two years.
- Raise its non-payroll forgiveness cap from 25% to at least 50%. That measure, ASTA said, would help businesses spend more on non-payroll expenses like rent or utilities.
- Clarify if agency payments made to independent contracts may be included in their payroll, which is used to determine the loan's amount.
- "Treat independent contractors and the self-employed equally," ASTA said, as there was an initial week-long application gap between freestanding businesses and ICs when the program launched.