A bill known as the Paycheck Protection Small Business Forgiveness Act has been introduced to the Senate to modify loan forgiveness under the Paycheck Protection Program for small businesses in response to COVID-19, according to congress.gov.

The bipartisan bill, S. 4117, provides for automatic forgiveness of a paycheck protection loan that is not more than $150,000 if the recipient submits a one-page form. It also prohibits action against a lender relating to loan origination, forgiveness or guarantee based on the lender's reliance on certifications or documentation submitted by a loan applicant or recipient.

The bill has been referred to the Committee on Small Business and Entrepreneurship.

The approximately 3.7 million PPP loans of $150,000 or less account for 85% of all PPP approved loans but only 26% of the PPP funds delivered, according to one of the bill's co-sponsors, Shelley Moore Capito, R-West Virginia Capito.

The cost of applying for forgiveness for a PPP loan of this size is $2,000 for the small business and $500 for the lender, according to Capito. The legislation could save small businesses $7.4 billion and banks nearly $2 billion.