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Statement of the Hon. Dean Phillips on A Review of the SBA’s Grant Programs

COVID-19 sparked a once-in-a-lifetime crisis for American small businesses. As cases rose, COVID forced small firms across the country to shut their doors to protect their customers and employees and slow the spread of the virus.


By April of 2020, the number of active small business owners had fallen by 22%, the most significant drop on record in our nation’s history.


Since this dire situation emerged, members of this Committee have worked tirelessly in a bipartisan fashion to get small businesses the relief they need to stay afloat. In March of 2020, Congress created the Paycheck Protection Program and COVID-19 Economic Injury Disaster Loan program to provide small businesses with forgivable or low-interest loans to help them make it through the pandemic.


But for many small business owners, including many in my district that I’ve spoken with, taking on additional debt wasn’t feasible during these uncertain times.  This was especially true for the businesses in the entertainment and hospitality sectors that had their entire business model disrupted by the pandemic.


Recognizing the need for alternative relief options, Congress and this Committee have worked to provide direct economic relief to small firms that can’t afford to weigh down their balance sheets with more debt.


For today’s hearing, I’d like to focus on two major grant programs that Congress designed to reach hard-hit small businesses in some of the most impacted sectors of the economy. The Shuttered Venue Grant Operator program and Restaurant Revitalization Fund are two programs that launched in 2021 and will deliver nearly $50 billion in relief to small firms. This has been a monumental task for the SBA, and I would like to impress upon all of us today that Congress and the SBA have worked hard to ensure that struggling small businesses have access to this unprecedented direct financial support.


I hope that by taking a closer look at these programs, we can gain a better understanding of the challenges that federal grant programs face, as well as the important relief that these programs are providing to struggling small businesses across the country.


SVOG provided SBA with $15 billion for grants to various entities across the hard-hit live events industry that could demonstrate revenue loss. The implementation of SVOG was no small task for SBA. As we examine the program, it’s essential to consider the complexity in launching a brand-new federal grant program. Unlike other programs, SVOG required that SBA create an effective program for both for-profit and non-profit eligible entities that often have different revenue generation and accounting systems.


I hope today’s hearing allows us to explore benefits that businesses are hoping to receive from SVOG, and find ways to help SBA administer the program effectively and get relief to struggling entities.


As COVID continued to wreak havoc on the dining and hospitality sector earlier this year, Congress stepped in and delivered much-needed relief through the Restaurant Revitalization Fund. 


The RRF provided $28.6 billion to SBA for grants to qualifying food and beverage establishments. The program also took steps to ensure that funds reached the most vulnerable small businesses, including instituting a $5 billion set aside for small firms with less than $500,000 in gross receipts and an initial 21-day prioritization period for women, veteran, and underserved small businesses.


These measures proved to be effective at getting aid to small businesses that had been neglected during previous relief efforts and have borne the brunt of the pandemic. As of May 20th, over half of all applicants to RRF were women, veterans, and socially and economically disadvantaged business owners.  


On May 18th, SBA announced that RRF had distributed $6 billion to nearly 38,000 applicants. At the same time, they reported that RRF received 303,000 applications, with a total demand of more than $69 billion. Without additional funding, for this program from Congress, eligible entities requesting billions of dollars in need for relief will go unfulfilled.


Since the beginning of the pandemic, members of this Committee have worked to improve relief programs to meet the needs of small businesses and get relief to those that need it.


I hope that today’s hearing allows us to explore these programs’ challenges and triumphs and steps this Committee can take to improve them.

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