Republicans And Democrats Agree: Crucial Help Needed Immediately For Small Businesses Beyond PPP Funding
A bipartisan letter today signed by over 100 U.S. Representatives evenly split among Republicans and Democrats emphasized that problems being experienced by American small businesses navigating government assistance amid the economic downturn caused by the COVID-19 pandemic go well beyond funding for the Paycheck Protection Program (PPP).
The letter, led by Rep. Bradley Byrne (R-AL) and signed by 50+ Republicans, including the Ranking Member of the House Committee on Energy and Commerce, sought funding and improvements for another key program supporting small businesses: Economic Injury Disaster Loans (EIDL).
The Members wrote:
“As you are aware, millions of small business owners are waiting for a response from the SBA regarding EIDL loans and applications for a CARES Act grant. Based upon the CARES Act’s requirement that these grants be distributed within three days, many small business owners have been confused and frustrated regarding the status of their loan and grant application.
“The guidance from the SBA to our offices has been that we should direct constituents to contact the SBA for these inquiries; however, we have received reports of long wait times and unsatisfactory answers regarding loan status when inquiries are placed. Many of our constituents have struggled to even determine if their loan application has been received...
“We are also greatly concerned regarding reports of severe oversubscription of the EIDL program. Given the average request of a $200,000 loan and a $10,000 grant, many small businesses simply cannot weather the COVID-19 crisis if initial distributions are limited to as little as $15,000 for loans and grants are rationed by number of employees. For that reason, we would strongly back an appropriations request by the Administration to allow the EIDL program to meet the average demand of requests received.
“…We are concerned that many small businesses cannot wait much longer to receive EIDL funds from the federal government. Many of these businesses and other organizations need EIDL funds to supplement their Paycheck Protection Program (PPP) loan, are not good candidates for the PPP due to its requirements or are not eligible for that program at all.”
Members of Congress have been told by the Small Business Administration that the bulk of EIDL loans, intended to help small businesses impacted by disasters including the pandemic, have been limited to $15,000 each, a grossly insufficient amount of money compared to many businesses’ needs, because the “overwhelmed” program is “getting low on funds.” Many if not most businesses which applied for loans have not received any money yet.
Despite the bipartisan agreement on the need to fix and fund the EIDL program, however, the Senate Republican proposal advanced by Majority Leader Mitch McConnell does not address EIDL at all and contains no money for the beleaguered program. McConnell, who went so far as to claim that PPP was “the only part of [the CARES Act] that is currently at risk of running out of money,” apparently remains unaware of the budgetary and administrative woes afflicting EIDL.
The legislative proposal put forward by House and Senate Democrats would direct billions to both EIDL and the Paycheck Protection Program, while also making policy fixes to both EIDL and PPP to streamline the loan processes for small businesses. Technical and administrative problems have prevented most small businesses approved for loans from receiving money so far through the Paycheck Protection Program.
The Democratic proposal also directs funds towards hospitals and state and local governments, which despite being on the front lines of fighting the pandemic, have already been forced to lay off workers as the burgeoning economic downturn crushes their budgets.