No, I am not talking about beseeching forgiveness from my acquaintances in anticipation of Rosh Hashana.

I’m discussing the many banks are not letting us file for forgiveness form the Paycheck Protection Program (PPP) loans.  That’s true even though the US Small Business Association (SBA) opened the Forgiveness Portal back on 10 August.

It’s not necessarily nefarious.  Because while the SBA has opened the portal, it has not released to the banks what the final processes by which such forgiveness shall be approved.

Oh, sure, the legislation exists.  But, there are moves afoot to automatically forgive many of the smaller businesses (the ones for which this loan program was intended) automatically.  For those larger firms- the ones that probably shouldn’t have gotten them in the first place- or the ones that were creative by listing each sister company separately to maximize the loan funds they could accrue- they won’t be so easily forgiven.

Who would be such firms?  Do you remember Jim (and Tammy Fae) Bakker?  Well, their ministry got a loan (the amounts of each loan are not public- just the range of loan amounts) for at least $ 650K but less than $1.7KK.  Even while the FDA (Food and Drug Administration), FTC (Federal Trade Commission) and the NY Attorney General have cease and desist letters with his ministry for selling bogus remedies.

That’s clearly NOT a small loan.  But, what is a small loan under the PPP?  Many in the Capitol (Representatives and Senators) believe the cap should be $ 150K.  That level would mean that 4.2 million of the 5.2 million loans will be automatically forgiven.  Actually, it’s a bigger impact than that.  Sure, it’s 85% of the number of loans that would be forgiven.  But, it’s also 80% of the money granted under the PPP program.

Yet, many are worried that such blanket forgiveness may excuse the actions of some who abused the system (even if they did get a small loan).

But, let’s get real.  Do we really expect the IRS and the SBA  to investigate these 4.2 million loans granted to folks who have 10 employees or less?  Even if 100,000 businesses cheated, and (I am picking an arbitrary size) their average loan size was $ 75K, so we are talking about $ 7.5 billion- and the program issued some $550 billion in loans.  And, how effective will be the collection process?  As opposed to the 100,000 loans of $ 1KK or more- which means reviewing the 5000 loans that have raised alarm bells- will generate at least as much cash, while examining  1/20 the number.  A much more appropriate expenditure of energy and money.

I’m still waiting to file those completed apps for our clients.

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