Today U.S. Senator Josh Hawley (R-Mo.) sent a letter to Small Business Administration (SBA) Administrator Jovita Carranza criticizing persistent delays in disbursing disaster loans and an unacceptable lack of communication from the agency. In response to reports that loan amounts under the Economic Injury Disaster Loan (EIDL) program have been capped at $150,000, Senator Hawley writes that applicants have been permitted to borrow up to $2 million in previous disasters, and the intent of Congress was not for the SBA to place, new arbitrary limits on EIDL loans related to the coronavirus pandemic.
“Many of my constituents have been waiting for months now, with no updates about when they can expect their loans to be deposited in their accounts. When these constituents make formal inquires to SBA about their loan status, they are often given generic responses with no real timeline to help manage expectations,” said Senator Hawley. “Small businesses and workers across the country are urgently waiting for this relief and I urge you to take immediate action to disburse the remaining EIDL loans as expeditiously as possible."
Senator Hawley requested Administrator Carranza explain when the SBA imposed an upper limit on EIDL loans, why they decided to do so, and whether the EIDL program needs more appropriations from Congress.
In a previous letter to Administrator Carranza, Senator Hawley expressed concerns about reports of significant delays in the EIDL program.
Read the full letter here or below.
June 2, 2020
U.S. Small Business Administration
409 3rd St., SW
Washington, D.C. 20416
Dear Administrator Carranza:
I write with increasing alarm about the implementation of the Economic Injury Disaster Loan (EIDL) program. As I stated in my letter to you dated April 10, 2020, persistent delays concerning the EIDL program—coupled with a lack of communication—are unacceptable. While I appreciate that many emergency advance grants have now been disbursed, applicants in my state are still waiting for their principal loan amounts to be delivered. These issues reflect mismanagement of a critical relief program and must be fixed immediately.
As you know, since the EIDL program was operable before the Paycheck Protection Program, many small businesses decided to choose this route for relief. Yet, many of my constituents have been waiting for months now, with no updates about when they can expect their loans to be deposited in their accounts. When these constituents make formal inquires to SBA about their loan status, they are often given generic responses with no real timeline to help manage expectations. As you can imagine, this lack of certainty amplifies the difficulty of making critical business decisions in an already challenging environment.
Due to these delays, you can appreciate the frustration of my constituents when they discovered that loan amounts would be capped at $150,000. In previous disasters, applicants have been permitted to borrow up to $2 million, a maximum amount set out in statute. It was not the intent of Congress that SBA reduce this maximum loan amount when implementing the provisions of the CARES Act and other recent legislation. As you know, Congress provided $50 billion in additional funds for this program last month through the Paycheck Protection Program and Healthcare Enhancement Act, opening up even more resources for SBA to disburse EIDL loans. It’s disappointing that the $2.1 billion Congress appropriated in that same legislation for salaries, expenses, and administrative support to SBA has yet to yield better results.
Small businesses and workers across the country are urgently waiting for this relief and I urge you to take immediate action to disburse the remaining EIDL loans as expeditiously as possible. I also urge you to communicate with EIDL applicants immediately as to when they can expect to receive their loans. On the subject of the limit you have placed on the EIDL loan amounts, please answer the following questions by June 10, 2020:
- Some EIDL loan recipients have received funds in excess of $150,000. When did SBA impose this upper limit on funds for those with COVID-19 disruptions? Why was this done without an official public announcement?
- Is this limit identical for all applicants? Or are there exceptions?
- Why did SBA decide to impose this limit on EIDL loans?
- What analysis and justification did you use to arrive at the $150,000 maximum amount?
- If the program is in need of more appropriations to operate as Congress intended, can you provide an estimate for what additional resources are needed?
Thank you for your attention to this matter.