(Washington, D.C.) – U.S. Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin (D-Md.) today convened a hearing on the U.S. Small Business Administration's (SBA's) COVID Economic Injury Disaster Loan (EIDL) program. The COVID EIDL program was created by Congress in March 2020 to provide fixed rate, low interest, long-term capital to small businesses struggling due to the pandemic. The program has been especially useful to small businesses that do not have strong banking relationships. Since the beginning of the pandemic, the program has provided loans to 4 million small businesses totaling nearly $380 billion.
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Outstanding COVID EIDL Applications
According to the SBA, there are approximately 125,000 COVID EIDL applicants whose applications were approved but funds have not been disbursed; and there are an additional 41,000 applicants who have never received a decision.
During his opening statement , Cardin lauded the SBA's efforts to improve the COVID EIDL program under the leadership of President Joe Biden after the Trump administration undermined of the program. Cardin then pressed SBA Associate Administrator for the Office of Capital Access Patrick Kelley to build on the Biden administration's efforts by completing the program“in a way that represents the values of our committee and values the COVID EIDL program's importance to small businesses.”
On July 15, Cardin and Senators John Cornyn (R-Texas), Chris Van Hollen (D-Md.), and Roger Wicker (R-Miss.), along with 44 Senators sent a letter to SBA Administrator Isabella Casillas Guzman urging the SBA to process COVID EIDL applications that were received prior to the agency's May 6, 2022 deadline.
The letter followed weeks of reports from constituents and in the press that small business owners who submitted their applications prior to the SBA's May 6 deadline have remained effectively shut out of the process because the SBA has deemed their applications“unworkable” without providing a detailed explanation. Some of these applicants have worked for months to resolve system errors and resubmit documents only to be told that the program was out of funds. However, SBA has authority to use $800 million in remaining COVID EIDL subsidy to immediately provide more than $7 billion in additional loans.
“…'unworkable' is not denied,” Cardin said during an exchange with Associate Administrator Kelley.“In many instances, according to casework notes that we have, small business owners think they have given adequate information or could give the adequate information to complete their applications, but they have not been given an opportunity to do that. So, I urge you, for those whose applications can be adjudicated—whether it's a reconsideration or increased loan amount—the SBA must get those resolved. The numbers are getting small enough that it seems that the SBA should be able to handle those with the type of service that would be expected from the SBA… The SBA has to complete these applications…These small business owners need to know.”
Updated on Aug 3, 2022, 10:46 am
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