Van Hollen and Cardin urge SBA to process pending EIDL applications using available funds

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May 06, 2022

Today, the Chairman of the United States Senate Appropriations Subcommittee on Financial Services and General Government, Chris Van Hollen, and the Chairman of the United States Senate Committee on Small Business and Entrepreneurship, Ben Cardin (both D-Md.) sent a letter to U.S. Small Business Administration (SBA) Administrator Isabella Casillas Guzman. urging the agency to process pending applications for the COVID Economic Injury Disaster Loan (EIDL) program using available funds.

Last week, the SBA announced that the deadline for existing borrowers to submit requests for loan modifications, new hearings and appeals would be May 6. Yesterday, May 5, the SBA alerted borrowers that the agency would no longer be accepting applications – a day ahead of its own deadline, due to a lack of funding. By the SBA’s own admission, there may still be funds available for transfer to the program to meet demand.

The senators urged the SBA to use its transfer power to accommodate borrowers who wish to undergo a modification, rehearing or appeal. The senators wrote“By closing the program prematurely, the agency appears to have prioritized its own administrative needs over those of the thousands of borrowers awaiting decisions on their applications. Moreover, it did so in a way which unnecessarily confused borrowers and raised expectations.

The senators continued“…if funds do remain available that could be transferred under the IIJA’s authority to serve borrowers under the EIDL Lending Program, the SBA should exercise that authority immediately so that requests for amendments, new hearings and pending appeals can be processed and funded.”

You can read the full letter here or below:

Dear Administrator Guzman:

We are writing to express our disappointment with the Small Business Administration’s (SBA) decision to close the COVID EIDL program by May 6.and deadline it announced to borrowers last week. This decision is particularly disconcerting when, by the agency’s own admission, additional funds remain available to be transferred to the EIDL program under Section 90006(b)(2)(A) of the Infrastructure Investment and Employment Act (IIJA). By closing the program prematurely, the agency appears to have prioritized its own administrative needs over those of the thousands of borrowers awaiting a decision on their applications. Moreover, it did so in a way that unnecessarily confused borrowers and raised expectations.

Over the past week, the SBA has sent out notifications encouraging existing borrowers to apply before the program closes on May 6.and. Announcing that the program ran out of funds on May 5andbefore the application deadline, the SBA misled thousands of struggling small businesses into believing that EIDL loan funding would be available.

In addition, if there are indeed funds available that could be transferred under the authority of the IIJA to serve borrowers under the EIDL lending program, the SBA should exercise that authority immediately so that requests for changes, new hearings and pending appeals can be processed and funded.

The administration’s request in the president’s budget for $320 million in transfer authorization from the EIDL Targeted Advance program has not been approved by Congress, and it is not in the administration’s power to prejudge of Congress’s intent in setting aside funds for the administration of the program when eligible small businesses have yet to be served. Considering that the SBA transferred $500 million to its administrative account less than two months ago under separate authority in IIJA Section 90006(b)(2)(B), the decision to deny tapping into the funding that could be used to keep the EIDL program operational is all the more difficult to grasp.

We expect your agency to take prompt action to immediately make all available funding available to eligible applicants and look forward to your prompt response.

Sincerely,



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