U.S. Sen. Rick Scott is wanting clarification about financial support for small business owners in Florida affected by the coronavirus.
In a letter sent Sunday to U.S. Treasury Secretary Steve Mnuchin, Scott said there are no requirements written into the Coronavirus Aid, Relief and Economic Security (CARES) Act regarding the “Paycheck Protection Program,” which is supposed to allow business owners to apply for bank loans. The act went into effect last week.
“I am receiving reports of small businesses who are simply unable to begin applying for Paycheck Protection Program loans from their financial institutions," Scott wrote. “Some financial institutions appear to be requiring unrelated products to apply for a loan, and other small business owners reported getting conflicting information as to when and how they could start their applications.”
Scott said he's heard from Floridians who are customers at banks of varying sizes that they cannot get Paycheck Protection Program loans "because they don't have existing business at the bank." Existing accounts are not a requirement of the law.
He added that lenders are telling him they need guidance about the documentation needed for loans.
According to the Department of the Treasury, the Paycheck Protection Program authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.
The act says loan amounts will be forgiven as long as: the loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over an eight-week period after the loan is made; and employee and compensation levels are maintained.
Scott asked Mnuchin and Jovita Carranza, the Administrator of the U.S. Small Business Administration, to provide information immediately including: confirmation that religious nonprofits and churches would not be excluded, and if the E-TRAN system, the SBA's electronic loan processing service, can handle and adapt to the new requirements and influx of applicants.
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