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EXECUTIVE SUMMARY
The Paycheck Protection Program (PPP) is a forgivable loan program designed to provide
a direct incentive for small businesses to keep their workers on the payroll. Congress
appropriated $659 billion for the program in the Coronavirus Aid, Relief, and Economic Security
(CARES) Act and the Paycheck Protection Program and Health Care Enhancement Act. This
enabled the Small Business Administration (SBA) to fund more than 4.9 million PPP loans.
Data show the PPP supported more than 51 million jobs across the country. The program
demonstrated how the government can work with the private sector to quickly and efficiently get
aid to those in need.
In the early weeks of the coronavirus crisis, much of the country shut down to limit the
spread of the deadly virus. Dr. Megan Ranney – a witness invited by Subcommittee Democrats–
testified at a hearing on May 21, 2020 that the economy was shut down to “flatten the curve of
this infection so our hospitals across the country would not be overrun.” The effects of the broad
shutdown orders, however, went far beyond the hospital population. Essential and non-essential
sectors of the economy were effectively closed. Consequently, many small businesses faced
bankruptcy and the country faced a burgeoning economic crisis. Republicans in Congress and the
Trump Administration designed the PPP to address this need, prioritizing rapid distribution of
funds to small businesses to keep employees on payroll while shutdown orders were in effect and
until the economy was fully restored. The program’s focus on getting money to workers quickly
saved millions of jobs and kept the economy from collapse.
Challenges related to connecting bank systems to the SBA’s E-Tran portal – which was
receiving an unprecedented volume of loan applications – caused delays immediately after PPP
went live on April 3, 2020. SBA and Treasury Department employees worked around the clock
to address those technical issues, and the program was fully operational within a matter of days.
The SBA and Treasury issued a series of guidance documents to clarify certain aspects of the
program, many of which were issued in response to discrete questions from applicants, lenders,
and Congress. The evolving nature of the program’s guidelines predictably caused confusion.
The urgent need to disburse funds to millions of small businesses, however, justified the
expedited rollout of the lending program, as Congress intended.
The SBA distributed PPP loans through thousands of financial institutions across the
country. SBA directed financial institutions to work with small businesses in their communities
and rapidly process loan applications. SBA and our nation’s banks worked tirelessly to provide
$342.3 billion in loans in 14 days. Behind the scenes, SBA and Treasury worked together to
quickly get funds to more than 84 percent of the country’s small businesses, with minimal fraud.
Under the lending terms of the PPP, small businesses may have their loans forgiven if
they abide by the CARES Act and SBA employee retention requirements. These incentives
ensured small businesses used the funds to pay employees and prevented abuses.