WASHINGTON, D.C.– Today, all Republican Members of the House Committee on Small Business, led by Chairman Williams (R-TX), wrote a letter to newly confirmed Small Business Administration (SBA) Administrator Kelly Loeffler, congratulating her and outlining the issues created by the Biden-Harris Administration’s SBA.

“Over the past few years, the House Committee on Small Business has sounded the alarm on actions taken by the Biden-Harris Small Business Administration that have moved the agency far away from its intended mission: serving Main Street America,” said Chairman Williams. “The Committee looks forward to working with Administrator Loeffler and the Trump Administration to return credibility and transparency to the SBA. Together, we will ensure small businesses have a voice in our government and bring the Golden Age of America to Main Street.”

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Read the story here.
Read the full letter here. 
Read key excerpts from the letter below:

“The House Committee on Small Business (Committee) congratulates you on being confirmed as the Small Business Administration’s (SBA) 28th Administrator. As Chairman of the Committee, I am confident that under your leadership, the SBA will become more efficient and return to its core mission of serving Main Street America. To that end, I would like to bring to your attention to numerous issues identified at the SBA during the Biden-Harris Administration that threatened taxpayer dollars, harmed small businesses, and moved the SBA further away from its duty to assist America’s small businesses.

Electioneering

“In 2024, the SBA entered into a Memorandum of Understanding (MOU) with the Michigan Department of State, which allowed the SBA to register voters at its events in Michigan and from the SBA’s website. Despite numerous requests and multiple subpoenas, former Administrator Guzman and the Biden-Harris SBA were persistently unable or unwilling to provide the Committee with the information requested. While President Trump’s rescission of Executive Order 14019 functionally ended this practice, the Committee is still deeply troubled by the lack of transparency from the Biden-Harris SBA and looks forward to working with you to determine what impact this may have had on the 2024 election.

Guardrails removed from loan programs

“Equally as troubling, in April 2023, the SBA issued two Final Rules titled, “Affiliation and Lending Criteria for the SBA Business Loan Programs,” and “Small Business Lending Authorization.” The changes made in these rules present an immediate threat to the health of the SBA’s flagship 7(a) lending portfolio.

“The Biden-Harris SBA removal of guardrails from the 7(a) program has already potentially put the 7(a) portfolio, backed by taxpayer dollars, at risk. The “Affiliation and Lending Criteria for the SBA Business Loan Programs Rule” removed the standardized underwriting procedures for 7(a) loans. These prudent underwriting standards were guardrails that had ensured programmatic integrity for decades. Unsurprisingly, according to data provided by the Biden-Harris SBA, the Early Default Rate and 12-month Default Rate as of June 2024 were over two times higher than their respective rates just one year prior. It appears that the Biden-Harris refusal to protect taxpayers from losses has compromised the integrity of the 7(a) program.

“Further, the “Small Business Lending Company (SBLC) Moratorium Recission and Removal of the Requirement for a Loan Authorization Rule” removed the cap on the number of SBLCs that could participate in the flagship 7(a) lending program. The cap that had been in place  for 40 years reflected the SBA’s maximum oversight capacity of SBLCs. However, in2024 the SBA increased the number of SBLCs by seven, with four new SBLC licenses being awarded less than a month before President Trump’s inauguration. Alarmingly, one of the Biden-Harris SBLC awardees, Funding Circle, was granted a license despite the CEO’s announcement that their U.S. business was shutting down due to their net operating losses, calling into question how rigorous the SBA reviewed SBLC applications.

“The Committee remains concerned that these two rules together would lead to a significantly riskier 7(a) loan portfolio, leaving taxpayers to foot the bill in the form of a large subsidy. The Committee looks forward to assisting in your efforts to ensure that the SBA programs are financially sustainable and protect taxpayers from unnecessary risk.

Unwilling and unable to recoup funds from COVID fraud

“During the 118th Congress, the Committee dedicated substantial resources to investigating waste, fraud, and abuse in the lending programs established in response to the COVID-19 Pandemic. Unfortunately, the Biden-Harris SBA delayed and stonewalled nearly all of the Committee’s requests for information. It is estimated that across the SBA’s COVID-19Lending programs, approximately $200 billion went to potentially fraudulent recipients. As the Department of Government Efficiency (DOGE) bolsters the Trump Administration’s efforts to root out waste and fraud, the Committee looks forward to working with you and DOGE to hold fraudsters accountable. That is why one of my first actions this Congress was to introduce H.R. 825, the Assisting Small Businesses Not Fraudsters Act, which would permanently BANFRAUDSTERS from SBA assistance.

“Further, in 2022 the SBA unilaterally decided to suspend collection activities on delinquent COVID-19 Economic Injury Disaster Loans and Paycheck Protection Program valued at $100,000 or less. The Committee repeatedly informed the SBA that this decision would undermine the ability of the SBA to reclaim pandemic funds and pursue fraud within these programs. Despite consistent pressure from the Committee and other stakeholders, it took the Biden-Harris SBA over 18 months to reverse this decision. The Committee is interested in determining the Biden-Harris SBA’s rationale for this decision and seeks to understand the impact this had on the ability of law enforcement to track and prosecute fraud.

Misguided Contracting Goals

“Finally, the Biden-Harris Administration advanced contracting goals that unfairly favored some businesses over others and contradicted the goals created by Congress. Fortunately, this policy was revoked by President Trump on his first day in office. The Committee appreciates the opportunity to work with you to ensure that the SBA’s goals fit with Congress’s intent, and create a strong, merit-based system of competition in Federal small business contracting.

“The Committee looks forward to working with you to resolve these issues and build a more efficient SBA. Increasing the efficiency of the SBA will help ensure that small businesses, which make up 99.9 percent of all businesses in the United States, are brought into the golden age of America.”

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