Brown, Colleagues Send Bipartisan Letter Urging SBA to Process All Eligible COVID EIDL Applications



Brown has Heard from Ohio Small Business Owners Who Are Calling on SBA to Take Action

WASHINGTON, D.C. – U.S. Senator Sherrod Brown (D-OH) joined U.S. Senators Ben Cardin (D-MD), John Cornyn (R-TX), Chris Van Hollen (D-MD), Roger Wicker (R-MS) and 43 of their Senate colleagues in sending a letter to U.S. Small Business Administration (SBA) Administrator Isabella Casillas Guzman urging the SBA to process COVID Economic Injury Disaster Loan (EIDL) applications that were received prior to the agency’s May 6, 2022 deadline.

The COVID EIDL program has provided loans to nearly four million small businesses since the beginning of the pandemic—serving as an essential source of capital for small businesses, especially those that could not obtain credit to survive the pandemic from other lenders.

“While we recognize the agency has assisted an unprecedented number of small businesses throughout the pandemic, our offices continue to hear from thousands of prospective borrowers awaiting consideration,” the lawmakers wrote. “We also continue to hear from EIDL applicants with disputed rejections who have received no communication from the administration in months. EIDL was a lifeline for businesses throughout this pandemic, but many of them continue to struggle. The program is too important to shut down prematurely. While funds remain, we expect SBA to process all eligible applications and appeals that have been submitted by the request deadline.”

On Thursday, April 28, the SBA announced a May 6, 2022 submission deadline for COVID EIDL loan modifications, increase requests, and denial reconsiderations. Many applicants who submitted prior to the deadline remain in limbo due to the SBA’s decision to stop processing certain applications. Instead, the SBA has issued a vague commitment to process “workable” applications, which has led to many deserving borrowers not receiving the funds they need.

A copy of the letter is available here.

Dear Administrator Guzman:

We write today to ask the Small Business Administration (SBA) to resume processing COVID Economic Injury Disaster Loan (EIDL) applications that were received prior to the agency’s May 6, 2022 request deadline, and ensure applicants with outstanding appeals receive due consideration. While we recognize the agency has assisted an unprecedented number of small businesses throughout the pandemic, our offices continue to hear from thousands of prospective borrowers awaiting consideration. We also continue to hear from EIDL applicants with disputed rejections who have received no communication from the administration in months. EIDL was a lifeline for businesses throughout this pandemic, but many of them continue to struggle.  The program is too important to shut down prematurely. While funds remain, we expect SBA to process all eligible applications and appeals that have been submitted by the request deadline.

Nearly four million borrowers have benefited from the EIDL program, including during the most difficult period of the pandemic when businesses could not obtain credit from other lenders. Thanks to the program, millions of business owners were able to keep their enterprises running and adjust to the changing dynamics of the pandemic.

However, our offices have heard from many businesses that received conflicting or confusing instructions as they applied for the program. Some business owners were asked to submit the same form multiple times and received assurances from an SBA representative that they were compliant, only to be told after waiting for weeks and months that they still failed to meet program guidelines. SBA’s communication with borrowers has not met our expectations and has undermined public faith in the agency.

Given that many applicants have not received final consideration, we find it difficult to understand SBA’s decision to stop processing requests that were submitted by the May 6thsubmission deadline. Rather than processing every eligible applicant as it should, the agency has fallen back on a vague commitment to process “workable” applications. Based on this unsatisfying standard, our offices have seen far too many deserving applicants turned away by SBA. “Workability” is not an acceptable standard to justify rejecting a borrower who is eligible and in need. The bar for denial is eligibility, not SBA’s willingness to continue processing applications. We find it particularly troubling that your agency continues to tell our offices that loans cannot be completed due to the exhaustion of funds when $800 million in loan subsidy remains – enough to support more than $7 billion in lending.

We respect that SBA will not approve every applicant, but we expect that when someone is deemed ineligible, SBA will provide a specific, unambiguous explanation for its decision. Anything short of that does a disservice to the thousands of business owners who have been led to believe they have done everything right, only to be told that their application cannot be processed because the program has closed.

The EIDL program has been a vital resource for struggling small businesses throughout the pandemic, but so long as eligible businesses remain unserved, SBA still has work to do. We expect you to ensure every deserving business that has submitted applications or appeals on time receives fair consideration.