Manchin, Bipartisan Senators Urge Small Business Administration to Process Remaining COVID Loan Applications

Washington, DC – U.S. Senator Joe Manchin (D-WV) led 48 bipartisan Senators in urging Small Business Administration (SBA) Administrator Isabella Casillas Guzman to process the remaining COVID Economic Injury Disaster Loan (EIDL) applications from small businesses in West Virginia and across the country. The COVID EIDL program has provided critical relief to nearly four million small businesses since the beginning of the COVID-19 pandemic and continues to play an essential role in the economic recovery of communities across West Virginia.

“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 to ensure that applicants with outstanding appeals receive due consideration,” the Senators wrote in part. “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.”

On April 28, 2022, the SBA announced a May 6, 2022 submission deadline for COVID EIDL loan modifications, increase requests and denial reconsiderations. However, many qualified small businesses who submitted their applications prior to the deadline remain in limbo following the SBA’s decision to stop processing certain applications. The SBA has committed to processing “workable” applications, but many deserving borrowers have still not had their forms processed to receive the funds they need and deserve.

“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 6th submission deadline,” the Senators continued. “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.”

Senator Manchin was joined by Senators Ben Cardin (D-MD), John Cornyn (R-TX), Chris Van Hollen (D-MD), Roger Wicker (R-MS), Michael Bennet D-CO), Bill Cassidy (R-LA), Catherine Cortez Masto (D-NV), Marsha Blackburn (R-TN), Mark Kelly (D-AZ), Ron Wyden (D-OR), Patty Murray (D-WA), Raphael Warnock (D-GA), Maggie Hassan (D-NH), John Hickenlooper (D-CO), Alex Padilla (D-CA), Bernie Sanders (I-VT), Chuck Schumer (D-NY), Jack Reed (D-RI), Sherrod Brown (D-OH), Richard Blumenthal (D-CT), Kirsten Gillibrand (D-NY), Bob Casey Jr. (D-PA), Jeanne Shaheen (D-NH), Jacky Rosen (D-NV), Sheldon Whitehouse (D-RI), Krysten Sinema (D-AZ), Ed Markey (D-MA), Cory Booker (D-NJ), Tina Smith (D-MN), Mazie Hirono (D-HI), Tammy Duckworth (D-IL), Tammy Baldwin (D-WI), Debbie Stabenow (D-MI), Tim Kaine (D-VA), Ben Ray Luján (D-NM), Amy Klobuchar (D-MN), Tom Carper (D-DE), Dianne Feinstein (D-CA), Dick Durbin (D-IL), Patrick Leahy (D-VT), Brian Schatz (D-HI), Jon Ossoff (D-GA), Gary Peters (D-MI), Jeff Merkley (D-OR), Mark Warner (D-WV), Elizabeth Warren (D-MA) and Martin Heinrich (D-NM).

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 to ensure that 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 6th submission 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.