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Source : Small Business Administration
June 1, 2021
Author : Alex Bustillos
This is a topic we at Contractor News have been monitoring for some time as small businesses owners on social media have tried to use what little voice they have to sound the alarm about the SBA’s handling of the Economic Injury Disaster Loan (EIDL) program.
EIDL was made law by the March 2020 CARES Act, the first of three coronavirus stimulus packages. By February of this year, the EIDL program had doled out more than $200 billion in grants.
However, and extension of the program, the Targeted EIDL Advance, passed with the December 2020 stimulus package, has fared less well.
In mid-May, Biz Journal reported in an article entitled “Still waiting for a Targeted EIDL Advance cash grant? You're not alone” that the SBA “has funded about $855.8 million for its Targeted EIDL Advance so far.”
Rather than asking businesses to apply for the funds, the SBA contacted them directly. So why is it that less than a billion of the $35 billion made available under the program has not yet made it into the hands of small businesses?
The SBA claimed it had invited 3.2 million businesses to apply, and yet, only 103,000 businesses have gotten money under the revamped EIDL program as of May 13.
In other words, just a little more than three percent of the businesses invited by the SBA to apply for relief have been given relief. Newsy additionally reports that more than half of those that have actually applied were denied.
Meanwhile, stories have been reported of small businesses invited to apply, and then denied because the owner is default on child support payments. The only problem? The owner has no children. Another California-born small business owner invited to apply was denied for not being a U.S. citizen. Others have been informed by the SBA that they are not eligible because they are dead, which was news to them.
The SBA has even admitted that a technical glitch caused many to be denied without explanation whatsoever.
Some have also taken to social media to highlight their difficult getting EIDL money from banks as well.
This is nothing short of a disaster. Small businesses form the backbone of the U.S. economy, and as we have previously reported, more than 1,000 small businesses have closed per day during the pandemic.
Stories of business owners waiting for EIDL payments have flooded social media for several months now. Songs have been composed about the failures of the program. One YouTuber who consistently comments on the program consistently racks up upwards of 10,000 views per video, and sometimes more than 20,000. The channel operator, Jason McElhone, has accrued more than 65,000 subscribers since March 2020, talking mostly about the EIDL program.
On Monday, Memorial Day, SBA Administrator Isabel Guzman tweeted an innocuous message to U.S. military veterans, but found her replies flooded with messages about the EIDL program. One Twitter user included the message “No EIDL, no peace.”
Brandon Friedman, a military veteran, small business owner and columnist pointed out how the SBA was being pilloried by small business owners, some claiming they have been waiting for three months for their money.
“What I do know is thousands (millions?) of American small businesses have applied for these covid-related relief funds and SBA currently cannot tell them when their EIDLs may be funded or when their modifications may be processed,” wrote Friedman on Twitter.
He added that contacting the SBA for information is a bureaucratic labyrinth and “customer service reps appear to be contractors who have no knowledge of the process and no authority to assist businesses.”
He continued: “So would I like to speak to the manager of SBA? Sure. But in the interest of advancing open, transparent government and helping other businesses, it would just be nice if [the SBA] could handle the basics of this challenge:”
Here at Contractor News we have written in the past on how difficult it is for veteran owned firms to get business from most state governments. Is it going to be this hard at the federal level as well?