Letter to Hon. Steven Mnuchin, Secretary of the Treasury and Hon. Jovita Carranza, U.S. Small Business Administration Administrator - What rationale for EIDL limits?

Letter

Dear Secretary Mnuchin and Administrator Carranza,

We write to raise concerns for a continued lack of transparency and guidance around the implementation of the Economic Injury Disaster Loan (EIDL) Program. This historically successful disaster relief program has faced persistent challenges throughout the COVID-19 pandemic, creating confusion and stress for millions of small business owners who now, more than ever, need clarity and financial relief. We request your immediate response to the below concerns so that we may work together to provide small business owners with the information and resources they so desperately need.

We recognize that the SBA is facing an unprecedented volume of applications for EIDL loans and advance grants, which is why Congress allocated an additional $50 billion for the program in late April. It was the intent of Congress that these funds be put to immediate use to provide financial support to millions of small business owners who are anxiously awaiting loan and advance grant approval. Yet, we continue to hear concerning reports from our constituents that applications as far back as March have yet to be addressed and attempts to contact the SBA through the recommended channels are futile.

We are further concerned by SBA's unilateral decision to cap EIDL loans at $150,000, despite clear language in law stating that small businesses may borrow up to $2 million. This change was not only inadequately announced, but will leave millions of applicants in the lurch when they discover the loan they have waited months to receive is as much as $1,850,000 under their calculated need to weather this crisis. During a time of such uncertainty, American business owners need, and deserve, assurances that the relief they have been promised is in fact on its way. With this in mind, we request answers to the following questions:

1. Application Status
a. What steps are the SBA taking to update individual applicants, currently in the system, on the
status of their application?
b. What improvements are the SBA making to ensure applicants are informed of eligibility in a timely fashion?
2. EIDL Loan and Advance Grants:
a. What was the SBA's reasoning for lowering the EIDL maximum loan amount from
$2,000,000 to $150,000?
b. What steps has the SBA taken to update small business owners who applied for loans above
the new limit?
c. What guidance has the SBA provided current applicants on changes made to available EIDL
advance grants, and what they can expect to receive?
As directed by Congress, we are pleased that agriculture related businesses now have access to the EIDL program, but we are concerned that now over a month and a half after limiting eligibility for EIDL, the SBA has not provided any guidance on when non-agriculture related businesses can begin applying for the loans and advance grants once again. Given the lack of data shared on the status of the EIDL program, we are further concerned that a backlog of new agriculture related EIDL applicants is growing.
3. New EIDL Applications:
a. What is the existing backlog of new EIDL applicants from agriculture related businesses?
b. What is the SBA's timeline for extending EIDL eligibility to all small business owners?

Lastly, we echo the call from our House colleagues in a May 4th letter, and Senators in a May 9th letter, requesting regular updates to Congress on the number of applicants served thus far through the EIDL program and the total amount of funds distributed. We understand the SBA is under immense pressure, but the agency is not alone in facing unprecedented demands during this pandemic. Transparency is paramount to providing Congress and small business owners with the information we need to plan for next steps, and we look forward to more timely updates from the SBA.

Thank you for your attention to this matter, as well as your work on behalf of small businesses nationwide. We look forward to your response.