Good news for small-business owners: You might not have to pay back that federal loan. Treasury Secretary Steven Mnuchin said as much Friday in a House committee meeting where he pushed for another round of Paycheck Protection Program loans to struggling businesses, the Wall Street Journal reports. "One of the things we will talk about is should we just have some forgiveness for the small loans?" Mnuchin said. "I think that is something we should consider." His proposal, echoed by US banks and trade associations, would turn PPP loans of up to $150,000 into grants. That would affect 86% of the nearly 5 million PPP loans so far, and roughly 27% of about $520 billion lent by the program.
One issue with all that forgiveness: Companies that borrowed the money improperly might get off scot-free. After all, businesses that applied didn't have to demonstrate their need for the rescue funding. On that front, Mnuchin said "we should obviously make sure there is some fraud protection" if the smaller PPP loans are forgiven. He also wanted the PPP to issue more loans and take extra care that they go to the neediest businesses, Politico reports. "This time we need to have a revenue test and making sure money is going to businesses that have significant revenue declines," he said. There's concern that some PPP loans went to well-connected businesses and might not have targeted employee paychecks as intended, per the Washington Post. (Read more Steven Mnuchin stories.)