As Maine Small Businesses Face Delays for Economic Injury Disaster Loans, Collins, King Urge SBA to Speed Up Funding, Provide “Clear, Concise, and Accurate Guidance” on Eligibility

Under the CARES Act, small businesses were told they would receive an advance of up to $10,000 on emergency loans within three days of making the request

WASHINGTON, DC – Today, U.S. Senators Susan Collins (R-Maine) and Angus King (I-Maine) pressed the administration to speedily release funds from the Emergency Economic Injury Disaster Loan (EIDL) Grant Program, which was established in the CARES Act to make sure small businesses facing immediate needs could quickly access the direct financial support they need to survive. In a letter to Small Business Administration (SBA) Administrator Jovita Carranza, Senators Collins and King raise their concerns that despite the law’s intent to provide funds within three days of the business’ request, many small businesses in Maine and across the country are still waiting after a week or more to receive this vital support. To remedy the situation, the senators request that the SBA provide “clear, concise, and accurate guidance” and release EIDL funds swiftly to businesses.

 

“The coronavirus epidemic has created extraordinary hardship for small businesses and their employees in every part of our Nation,” wrote Senators Collins and King. “When Congress voted to establish the Emergency Economic Injury Disaster Loan (“EIDL”) Grant program, we did so because small businesses require direct financial support today.  We ask that the SBA release emergency EIDL grants to businesses promptly and also issue clear, concise, and accurate guidance on the EIDL program immediately. The EIDL program, similar to the PPP, is under tremendous financial strain due to overwhelming demand, and we urge the Administration to request additional funding for EIDLs in addition to the request it has made for the PPP.

 

“We also ask that the SBA release emergency EIDL grants to businesses promptly and issue clear, concise, and accurate guidance on the EIDL program immediately.  Doing so will ensure that small businesses speedily access EIDL and emergency EIDL grant resources, as Congress intended.”

 

As a member of the Small Business Task Force, Senator Collins co-authored the Keeping American Workers Paid and Employed Act with Senators Marco Rubio (R-FL), Ben Cardin (D-MD), and Jeanne Shaheen (D-NH), which provided $377 billion for small businesses to meet their payroll and expenses.  Their legislation created the Paycheck Protection Program (PPP) to help small employers continue to keep paying their workers for 8-weeks during the COVID-19 pandemic.  These loans will be forgiven so long as employers keep their workers on payroll during this period.  Certain overhead expenses, including utilities, are also included.  As of this morning, 12,364 small employers in Maine have been approved for $1.98 billion in PPP loans.

 

Senator King has fought to support and stay connected with Maine’s small businesses throughout this crisis. He voted for the inclusion of $377 billion to help small businesses weather the economic slowdown in the Senate’s coronavirus response package. The legislation includes the King-backed Small Business Debt Relief Act, which creates a six-month payment holiday for existing small business loans through the Small Business Administration. The provision will help at least 1,883 businesses in Maine navigate the obstacles created by coronavirus and look toward the future. Days after the legislation passed, he joined a tele-conference to discuss the law with Maine business leaders, provide resources and information, and hear directly from Maine businesses on continuing challenges.

 

The full letter can be accessed here, and can be read below.

 

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Dear Administrator Carranza:

 

Thank you for the work that you and the SBA have done for small businesses in Maine and throughout the Nation during this difficult time for our country.  We appreciate the time that you took last week to speak to each of us about the Paycheck Protection Program (“PPP”) and look forward to future communication with you as we continue to support small business.

 

The coronavirus epidemic has created extraordinary hardship for small businesses and their employees in every part of our Nation.  When Congress voted to establish the Emergency Economic Injury Disaster Loan (“EIDL”) Grant program, we did so because small businesses require direct financial support today.  The EIDL program, similar to the PPP, is under tremendous financial strain due to overwhelming demand, and we urge the Administration to request additional funding for EIDLs in addition to the request it has made for the PPP.

 

We also ask that the SBA release emergency EIDL grants to businesses promptly and issue clear, concise, and accurate guidance on the EIDL program immediately.  Doing so will ensure that small businesses speedily access EIDL and emergency EIDL grant resources, as Congress intended.

 

The Emergency EIDL Grant program has very simple requirements.  Generally, a small business must have 500 employees or less, apply for an EIDL loan (which, under law, is available in amounts up to $2 million), and self-certify that it is an eligible entity.  If a small business meets these requirements, then the business may request an advance of up to $10,000 on its EIDL.  The SBA must deliver that advance within three days of the business’ request – yet, many businesses have waited for a week or more to receive grant funds.  

 

Additionally, during this hour of maximum need for small businesses and their employees, the lack of appropriate SBA guidance on either the EIDL program or the Emergency EIDL Grant program has prevented small businesses from receiving full EIDL grants and loans in a timely fashion.  Rumor has superseded fact, leading some eligible businesses not to apply for emergency EIDL grants, and some businesses with information that is at odds with the law – such as the notion that EIDL grants are tied to the number of workers that a business employs, or that EIDLs are capped at $15,000. 

 

Small businesses need full EIDL loans, emergency EIDL grant funds, and clear, concise, and accurate guidance on how to obtain them today.  We urge the SBA to request additional money from Congress for the EIDL program to ensure that funding is sufficient to support businesses’ need and to release EIDL loan and grant money speedily to the businesses that have applied for it.  Additionally, we ask that the SBA immediately publish a one-page fact sheet providing program details.  Your swift and thoughtful action will ease the hardship that the coronavirus epidemic has caused for small businesses and their employees.