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Struggles With Loans: Owners Frustrated With Forgiveness Process

Posted at 11:50 PM, Jun 16, 2020
and last updated 2020-06-16 23:50:07-04

LANSING, Mich. — Some small business owners say the process to get their paycheck protection program loans forgiven is still too difficult. Alexa Liacko spoke with one banking group pushing for automatic forgiveness.

Gail Lindley, Co-Owner of the Denver Bookbinding Company says that her business is "more than a business, it’s truly our life blood."

It’s a story 91 years in the making. "I’m the 3rd generation out of 5, so we’re really part of what goes on here, because we have a legacy that we’re continuing." A tradition of artistry, “my grandad learned bookbinding in Copenhagen.”

A family heritage Gail Lindley was desperate to save after COVID-19 slowed her business to nearly nothing.

There’s an invoice in here from February 26th that we still haven’t been paid for.

There were a lot of sleepless nights, we were wondering, ‘how are we going to pay our staff?’ But, a government loan from the paycheck protection program came just in time.

"I actually cried when we got it"

Now, Lindley is worried about the extensive requirements to make sure her loan is forgiven. The bank told us, ‘you really need to document well.’

The PPP loan forgiveness application is 11 pages long and requires companies to document all spending on payroll, rent and utilities.companies must also prove they’ve retained workers and kept wages the same to earn full loan forgiveness.

Consumer Bankers Association CEO, Richard Hunt, says documenting this is an unnecessary burden. "Right now, small businesses across the country are spending about $2000 more dollars and 15 more hours submitting another application packet, we’re saying, just forgive all the loans under $150,000"

Gail Lindley says "there’s only so many hours in a day, and i want to spend it working on my business not filling out forms."

The small business administration is requiring the most documentation for businesses who want full forgiveness.with the changes President Trump recently approved.

Businesses have 24 weeks instead of just 8 weeks to use the funding—and only 60% of the loan needs to be used for payroll.

"We can make that money last a little bit longer and be more thought full on how that’s doled out these changes are helping many", but Hunt says more needs to be done to lift time consuming burdens off small businesses just getting back to work.

"$150,000 or less constitutes 85% of all loans, but only 20% of all the funding, so those larger businesses would still have to submit a forgiveness process, but not the mom and pop shops who are still in the red right now trying to make ends meet."

For Lindley, she says automatic forgiveness would help a lot. she’s just hoping all the bookkeeping she’s done will be enough to keep her family’s story alive.

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