U.S. markets close in 3 hours 48 minutes
  • S&P 500

    3,816.04
    -15.35 (-0.40%)
     
  • Dow 30

    30,815.79
    -152.03 (-0.49%)
     
  • Nasdaq

    11,286.65
    -35.59 (-0.31%)
     
  • Russell 2000

    1,718.14
    -23.19 (-1.33%)
     
  • Crude Oil

    96.29
    -3.21 (-3.23%)
     
  • Gold

    1,731.70
    -32.20 (-1.83%)
     
  • Silver

    19.05
    -0.08 (-0.40%)
     
  • EUR/USD

    1.0173
    -0.0097 (-0.95%)
     
  • 10-Yr Bond

    2.8950
    +0.0860 (+3.06%)
     
  • GBP/USD

    1.1894
    -0.0058 (-0.48%)
     
  • USD/JPY

    135.6770
    -0.1650 (-0.12%)
     
  • BTC-USD

    20,136.95
    +635.52 (+3.26%)
     
  • CMC Crypto 200

    435.93
    +0.41 (+0.09%)
     
  • FTSE 100

    7,107.77
    +82.30 (+1.17%)
     
  • Nikkei 225

    26,107.65
    -315.82 (-1.20%)
     

'They have let me down': Small businesses hit SBA's sluggish COVID response

·Reporter
·5 min read

Fran Glover has been by her computer, waiting.

Glover — the president and founder of Joseph Dreamhouse Community Development Corp., a nonprofit organization dedicated to fighting food insecurity in South Florida — is like every other small business struggling to recoup staggering losses from the COVID-19 pandemic.

Currently, unemployment is hovering near pandemic-era lows and the jobs market is extremely tight. Still, more people aren’t able to purchase meals, and are seeking food distribution centers like Joseph Dreamhouse.

The extraordinary demand has overwhelmed the organization as donations taper off, Glover told Yahoo Finance. Meanwhile, federal assistance for small businesses has been sluggish and hard-fought at best, making it tough for Joseph Dreamhouse to address the needs of its community.

“The face of hunger has no age, no agenda, no race, no zip code or ethnic background,” Glover added.

Since the pandemic lockdown last year, three-quarters of the country’s small employers turned to the Small Business Administration (SBA) for help. But the demand for aid was so high that it left many entrepreneurs in limbo.

Business owners have a litany of complaints that include long phone wait times, questions that went unanswered, technical difficulties applying online, and unprocessed aid applications.

'They have let me down'

U.S. President Joe Biden turns to Small Business Administration (SBA) Administrator Isabella Casillas Guzman as he signed the
U.S. President Joe Biden turns to Small Business Administration (SBA) Administrator Isabella Casillas Guzman as he signed the "Paycheck Protection Program (PPP) Extension Act of 2021" into law in the Oval Office at the White House in Washington, U.S., March 30, 2021. REUTERS/Jonathan Ernst

At the heart of these problems is the Office of Disaster Assistance, a unit that issued more than $211 billion in pandemic-related Economic Injury Disaster Loans to help businesses reopen and stay open. Prior to COVID, the office provided loans for people to recover from the devastation caused after natural disasters.

Now, the SBA is revamping its COVID EIDL program by moving it from the agency’s Office of Disaster Assistance to the Office of Capital Access, which runs the Paycheck Protection Program.

“The goal of this transition is to help reduce processing backlogs, expand the impact of the programs by effectively delivering a product that meets the needs of American small businesses, and bring a recalibration of customer-focused principles to our processes,” a SBA spokesperson said in a statement.

For Glover, she’s waiting to see if this will help speed up the process. “They have let me down and they have let the community down,” Glover added.

President Joe Biden’s American Rescue Plan Act, signed in March, included additional aid for the nation’s more than 30 million small businesses. Part of the package was $15 billion in additional funding for Targeted Economic Injury Disaster Loan (EIDL) advance payments, including $5 billion for Supplemental targeted EIDL advance payments.

I may not be able to continue because I’ve maxed out my credit cards, my savings to help feed the community, where these families are dependent on my resources.Fran Glover, small business owner

Both the targeted and supplemental EIDL are forgivable, which means businesses could receive up to $15,000.

The targeted EIDL provides up to $10,000 to applicants with 300 or less employees in a low-income community. But business owners must show a more than 30% decrease in revenue over an eight-week period since March 2, 2020.

The supplemental version is for those hit the hardest by the pandemic. The $5,000 amount is meant for businesses with 10 or fewer employees, and a 50% loss for the same period.

Yet business owners who applied months ago are still waiting for money. This process has frustrated owners who are struggling to survive month-to-month, but don’t qualify for the grants because they aren’t physically located in low income areas as defined by an SBA mapping tool.

Glover is an example of that. She doesn't “qualify” for either EIDL programs due to the location of her organization. Instead, she was able to apply for a 24 month working capital loan through the SBA for $155,000.

It’s been well over 12 weeks since Glover applied, and she’s heard little to no response.

“It’s devastating,” Glover added. “I may not be able to continue because I’ve maxed out my credit cards, my savings to help feed the community, where these families are dependent on my resources.”

To try to move the process along, she’s been calling the SBA helpline twice a week but all they could tell her is that her “loan modification is still being processed.”

She ended up contacting Herbert Austin, an SBA’s district director in Texas, who then forwarded her email to Jonel Hein, South Florida’s district director, who helped her get in touch with a loan specialist this week.

“Everything is in place, but she said she could not approve the loan because she's not a loan officer and that she would try to do her best to expedite it, but it would be another two, three weeks possibly longer,” Glover said.

Now it's back in processing. She’s treading water, hoping her application will get approved.

If not, “that means my nonprofit would not be able to go on, my employees will have to move to the unemployment line, my families will no longer be serviced,” she explained.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

More from Dani:

Deloitte: CFOs optimistic, but hiring shortages, inflation, return to work fan economy concerns

Data: LGBTQ buyers opt for cheaper homes that need ‘TLC’ over pricier digs

No solution in sight as renters, landlords face ‘eviction cliff’ on June 30

SBA's shuttered venue cash off to slow start as 'nervous, worried' businesses await backstop

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit