SBA faces questions about delays, lack of communication with coronavirus relief programs

WASHINGTON — The federal agency in charge of helping small businesses during the coronavirus pandemic is facing sharp criticism over delays and poor communication.

A House panel held a hearing on Capitol Hill Wednesday and heard testimony from an administrator from the Small Business Administration (SBA).

Lawmakers from both parties said business owners have complained about the SBA’s handling of coronavirus relief programs.

“Questions on communication,” said Rep. Steve Chabot (R-Ohio), “questions on the status of their loan and questions surrounding the maximum loan under the program. When small business owners are left with limited information, common everyday business decisions become difficult.”

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“They’re experiencing chronic delays,” said Rep. Sharice Davids (D-Kansas). “A lack of transparency and response to their applications.”

Millions of loans have been approved under the Paycheck Protection Program (PPP) which is meant to help small business owners keep their staff employed.

There is also the Economic Injury Disaster Loan (EIDL), which gives businesses up to $10,000 to stay afloat during the pandemic.

“Looking back, we probably should have had better communications,” said James Rivera, Associate Administrator for SBA’s Office of Disaster Assistance. “Between mid-March and the end of April, the agency had to stop processing applications three times. This was due to the program changes made through CARES Act legislation, the lack of funds, and the need to set up an entirely new system to administer the grants.”

Rivera said the online system has since been revamped and the agency has hired more staff to help with loan applications.

“Our processing time due to volume and stoppages averaged around 41 days,” Rivera said. “Since we reopened the portal, our processing time for new applications is now five days.”

The Senate passed a last-minute extension for the PPP with a new deadline of Aug 8.

There is still more than $100 billion in unclaimed funds from the PPP.