Velázquez Conducts Oversight of SBA Office Overseeing COVID-19 Relief EIDL Program
Washington, July 1, 2020
Washington, D.C.— Today, the House Small Business Committee under Chairwoman Nydia M. Velázquez (D-NY) heard testimony from the head of the Small Business Administration’s (SBA) Office of Disaster Assistance (ODA). ODA has been responsible for the administration of COVID-19 relief loans through the Economic Injury Disaster Loan (EIDL) program.
“Throughout the process, SBA showed a lack of understanding of the challenges facing small businesses related to COVID-19,” said Chairwoman Velázquez. “It’s been months, and this Committee still has not received any communications from SBA regarding exactly how much money this program needs to fully meet the needs of small businesses and fulfill the demand for loans by every single applicant. Already, a number of large companies have declared bankruptcy post-COVID-19, and experts say it is not long before this wave of bankruptcies hit small businesses. We need to be doing more to help avert this outcome.”
EIDLs provide up to $2 million for working capital to help small businesses pay financial obligations that cannot be met as a direct result of a disaster. The EIDL program was activated in March, becoming the first economic relief program offered to small businesses hurt by COVID-19. Since then, Congress has appropriated billions of dollars for additional loans and grants for the program.
The Committee has heard from small businesses across the country that have experienced significant obstacles to obtaining relief through the EIDL program. At a June hearing, entrepreneurs described their experiences with the EIDL program, which included poor communication from SBA, slow processing times, and a lack of information regarding application status. Today, Members reviewed these issues as well as the structure of ODA and their procedure for processing EIDL loans.
During the hearing, SBA Associate Administrator of ODA, James Rivera testified on the obstacles his office faced in administering EIDL and steps they can take to improve the program.
“These are challenging times for our nation’s small businesses, and their resiliency through this pandemic will be the driving force for our nation’s economic recovery,” said James Rivera, Associate Administrator at the Office of Disaster Assistance at SBA. “The programs recently enacted through the CARES Act and related legislation play a key role in that recovery. They are essential economic relief programs, and we will continue working with you to ensure their ongoing success.”
“This program is too important for it to be continuously run in this fashion, especially when America’s small business owners are debating nightly whether they should continue to hold out hope, or simply close their doors for good,” said Chairwoman Velázquez. “As Congress continues to seek ways to help small businesses that need relief capital to survive the pandemic, I would implore you to submit to this Committee a proposal listing exactly the resources and funding your office needs to fully meet the needs of every single applicant that has been in the COVID-19 EIDL queue from the beginning.”