Velázquez Probes Problems Within SBA COVID-19 Relief EIDL Program
Washington, June 10, 2020
Washington, D.C.— Today, the House Small Business Committee under Chairwoman Nydia M. Velázquez (D-NY) gathered small business owners to examine issues within the Small Business Administration’s (SBA) COVID-19 Economic Injury Disaster Loan (EIDL) program. The virtual hearing featured EIDL applicants, who testified on their experience accessing the program and the many issues they faced throughout the process.
“More than three months after Congress first enacted legislation to provide economic relief to small businesses, borrowers are still reporting significant challenges with EIDL grants and loans,” said Chairwoman Velázquez. “This is blunting the positive impact this program could have for the small businesses that need help the most. As the Committee undertakes its oversight duties, we want to begin by hearing directly from small businesses who have applied for the program, so that we can understand the successes and challenges they have experienced.”
In response to the COVID-19 pandemic, Congress extended the EIDL program to provide relief for small businesses and appropriated billions of dollars for additional loans and grants within the program. However, small businesses across the country have expressed deep frustrations with EIDL stemming from issues including lack of information on application status, lack of communication from SBA, slow processing times, and a lack of transparency. The hearing allowed members to hear directly from EIDL applicants regarding these challenges and discuss ways that Congress can make improvements to the program.
“This SBA loan experience, the 58 days of not knowing anything, on top of COVID this has been the most stressful period I have ever experienced,” said Nancy Sexton, Owner The Muse Rooms NoHo in Hollywood, CA. “It has been horrendous. My entire business is built on customer service, good communication is king, and without that, you are sending businesses into absolute chaos."
“You’re in such a state of anxiety, not knowing if you are going to be approved. When they did give me a response, that wasn’t that great either,” said Jerome Whack, Owner of Christian Street Pharmacy in Philadelphia, PA. “It took them almost a month to respond, and it was vague, ‘unsatisfactory credit’ didn’t mean a lot to me.”
“I hope my experience highlights that while the SBA and the CARES ACT were designed to aid small businesses’ needs especially during times of crisis, the lack of infrastructure, and transparency surrounding the SBA contributed to the stress that I and other business owners were experiencing during the economic uncertainty of the COVID-19 pandemic,” said Dr. Craig Gerstein, Ophthalmologist at Gerstein Eye Institute in Chicago, Illinois. “The reality of the process in dealing with the SBA and specifically the EIDL program fell significantly short of what was promised through rhetoric and reassurances.”
The full virtual hearing can be viewed here.