Nevada small businesses that took out a Paycheck Protection Program loan of $50,000 or less will have an easier time applying for loan forgiveness, federal officials said late Thursday.
Businesses had expressed exasperation over the loan forgiveness process. In a report released in September, the Government Accountability Office said that the U.S. Small Business Administration estimates the forgiveness application would take three hours to fill out the standard form.
The streamlined application is a welcome relief to Beni Velazquez, chef and owner of Las Vegas eatery ChinaLatina.
“My partner and I are pretty much in the restaurant all the time,” he said, adding, “We’re barely making it,” even with the $12,500 he received from the PPP.
The federal program helped Nevada businesses weather the storm from the pandemic. The Nevada Bankers Association estimates that more than $4.1 billion flowed to businesses in the Silver State, with SBA data showing about 31,400 businesses receiving under $50,000.
Velazquez, who started the year with seven employees, was approved in May for the forgivable loan after his business closed in mid-March because of the COVID-19 pandemic.
The relief funds ran out by July and he and his business partner were forced to lay off the majority of his workforce. He’s only been able to keep one employee.
The SBA began making decisions on loan forgiveness applications on Oct. 2, an agency spokesperson told the Review-Journal.
“The new form introduced today demonstrates our relentless commitment to using every tool in our tool belt to help small businesses and the banks that have participated in this program,” said SBA Administrator Jovita Carranza in a statement Thursday. “We are continuing to ensure that small businesses are supported as they recover.”
Some banks in Nevada are already accepting applications, while others are still implementing the technology to do so.
Velazquez said he’s been waiting for his lender, Bank of America, to start the PPP loan forgiveness process.
Nevada business and banking leaders say the streamlined application is a good first step but doesn’t go far enough. Phyllis Gurgevich, president of the Nevada Bankers Association, said simplifying the loan forgiveness process is a welcome one that provides “a great relief to those businesses that qualify.”
“Spending valuable time and money on consultants and outside agencies in order to file an overly complicated application for forgiveness undermines the purpose of the program,” Gurgevich said.
Randi Thompson, Nevada director of the National Federation of Independent Business, said that small business owners are frustrated that it has taken this long to come up with a simplified process.
“However,” she said, “considering how the stimulus bill was rushed through back in the spring, it’s not surprising they had to spend some time on the back end to ensure compliance.”
Thompson notes that the new streamlined application has waived full-time equivalent and salary reduction calculations, and that PPP borrowers will only be required to fill out the two-page form and submit to lenders.
“Now if we could just get another round of PPP to keep small businesses open who are still struggling under the Governor’s 50 percent directive, that would really help,” Thompson said.