Luria demand action for small businesses on COVID-19 loans
Congresswoman Elaine Luria is demanding answers from the SBA regarding the problematic rollout of the Paycheck Protection Program, which has resulted in a delay of loan relief to her district.
This week, Luria, D-Va., sought clarity from SBA Administrator Jovita Carranza regarding issues with the SBA’s implementation of economic relief programs under the Coronavirus Aid, Relief, and Economic Stability (CARES) Act.
“As a former small business owner, I share the frustration felt by small business owners across Hampton Roads who are relying on economic relief programs to weather this crisis. Small businesses employ 115,000 Coastal Virginians and are the backbone of our regional economy,” said Luria. “The SBA’s issue-plagued rollout of relief programs is unacceptable when businesses need loans now. For the sake of our economy and the livelihoods of countless Americans, the SBA must identify and correct these problems immediately.”
Last month, Luria supported the CARES Act, which established the Paycheck Protection Program (PPP). This program provides small businesses and nonprofits forgivable loans to cover payroll and other costs over an eight-week period. Unfortunately, the execution of this program has been problematic.
Local business owners have recounted difficulties in applying for and receiving the loan. In addition, banks are contending with confusing and constantly changing guidelines on the loan submission process.
In her letter, Luria asks Carranza what steps are being taken to make it easier and faster for small businesses and lenders to submit PPP applications. She also asks if small business owners will receive notifications regarding the status of their application and when they will receive funds.
Another issue with the SBA’s administration of PPP loans is their requirement that 75 percent of the forgivable portion of the loan goes toward payroll costs.
In her letter, Luria states that this “was arbitrary and ignores congressional intent under the CARES Act.” She notes that it is harmful to businesses with high equipment or real estate costs, like businesses in the aquaculture and hospitality industries. The Congresswoman asks if the SBA will waive or modify this requirement for those businesses.
Luria’s letter highlights her concerns with the SBA’s administration of Economic Injury Disaster Loan (EIDL) Emergency Advance grants. Under the CARES Act, small businesses can receive an emergency EIDL grant of up to $10,000 within three days of applying for an EIDL loan.
Unfortunately, small business owners have not been receiving these grants within three days. Some are still waiting for their grant after well over a week. As a result, Congresswoman Luria demands to know what is causing this delay and when businesses will receive this funding.