Small businesses still on hook for rescue loans

When the government pledged to give small businesses billions of dollars in rescue loans during the pandemic, it was an offer almost too good to refuse: The loans could be forgiven if employers only maintained payroll.

In little more than four months, the Paycheck Protection Program doled out $525 billion in loans to 5.2 million borrowers, which economists estimate saved millions of jobs. But to date, none of the loans have been forgiven.

Lenders that helped the government deliver the money are warning that the effort is running into new delays and complications that could leave struggling employers on the hook with unanticipated debt.

Banks say the process for converting the government-backed loans into grants has been frustrating because of a lack of communication from the Small Business Administration and the Treasury Department, which have run the effort since Congress created it in March.

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