Isabella Casillas Guzman serves as the 27th Administrator of the U.S. Small Business Administration and sat down for a wide-ranging interview with Adam Shapiro on aid to restaurants, the end of the Paycheck Protection Program, and her message to struggling small business owners.
ADAM SHAPIRO: Administrator Guzman, this is your second time, actually, at the SBA, and I was curious what's different now, especially with the pandemic obviously, than when you were there several years ago with the Obama administration?
ISABELLA CASILLAS GUZMAN: In many ways, SBA is such a new agency, because it's scaled so dramatically to meet the needs of small businesses during COVID. So we've gone from a $40 billion average portfolio to over $1 trillion. The amount of lenders and partners that we engage with is at unprecedented levels. Truly, the demands on our services have increased, as well as the interest in small business. So that's really what's so different this time.
ADAM SHAPIRO: I would love to talk about one of the headlines that is now very big, and that's the restaurant relief program. Explain to us how that's going to work because, as I read it, if an entity is eligible, there's up to $10 million recoverable in lost revenue. Tell us how this works.
ISABELLA CASILLAS GUZMAN: The Restaurant Revitalization Fund is $28.6 billion for grants, not loans, which is so needed right now, especially with this sector of food and beverage businesses. And each restaurant-- or food and beverage business can access up to $5 million per location or up to $10 million per entity with affiliates, truly trying to help those who have had impact recover based on their revenue decline overall.
And so what we also have implemented, though, is a prioritization in the first 21 days for-- for businesses that were owned by women, or veterans, or disadvantaged socially and economically businesses. And so that prioritization has been really key, as well as prioritizing small, with $9.5 billion of the $28.6 set aside for smaller entities. It's-- clearly not all of them will need that full $10 million, and we want to reach everyone.
ADAM SHAPIRO: When you say prioritized for the people you identified, does that mean that those who are not in that group of prioritization miss out on getting funds?
ISABELLA CASILLAS GUZMAN: Everyone is eligible to apply day one. As a program overall, it's first come, first serve. And for the first 21 days of the program, SBA, by Congress's designation, has to prioritize those groups first for grants.
ADAM SHAPIRO: But first come, first serve doesn't mean that people not prioritized could miss out? Or could if the funds get depleted by the prioritization?
ISABELLA CASILLAS GUZMAN: The funds availability is critical You're right. And so with the $28.6 billion, we anticipate high demand, and so that is something that we're tracking on an ongoing basis.
ADAM SHAPIRO: I don't want to harp too much on this, but it would seem as if, then, we're disadvantaging people who might still need the money just as much, but because they're not women or as you described earlier, they might miss out.
ISABELLA CASILLAS GUZMAN: We also have the $9.5 billion set aside for smaller entities, really hoping to-- to reach those across-the-board businesses, underserved businesses who were not able to access relief at the same rate as other businesses and ensuring that we can rebuild equitably.
ADAM SHAPIRO: Ben Cardin, the senator from Maryland, I believe, he was on our platform earlier, and he talked about the PPP program being more finely-tuned. Can you help us understand what that means?
ISABELLA CASILLAS GUZMAN: What we've tried to do with this final few weeks of PPP is really emphasize the support for those smallest entities by shifting focus to specialty businesses that are five and under employees to make sure that they're able to access the program, as well as sole proprietors or independent contractors. So in terms of outreach and the types of focus that we have on PPP, we're making sure that those businesses not served previously are able to access the program.
ADAM SHAPIRO: I know that one of our local restaurants, the man who runs it, he's from India, and he was having trouble the very first time with the PPP program. He did eventually-- in the second iteration, he was able to get some assistance. But is there a timeline as to when legitimate claims can still be accepted? We're already passed that?
ISABELLA CASILLAS GUZMAN: The PPP Extension Act allowed us to continue past the end of March through the end of May, and so there's still time to access the program for a business who either is coming back for an additional PPP loan or their first loan. And so especially through our community financial institutions, our CDFIs, our minority depository institutions, and our CDC mission lenders, we want businesses to be able to access the funds in these final weeks.
ADAM SHAPIRO: You know, you come from-- when we looked at your background and what the agency supplied to us, you were raised in a family that ran a small business. What has surprised you since coming back to the agency about the way it is administering and assisting in these programs to help small businesses, which are such a big part of this economy, get back on their feet?
ISABELLA CASILLAS GUZMAN: Well, really, trying to look forward. What we've seen over the past year-plus is that businesses have had to adapt and pivot. We've asked them to in order to survive during COVID-19. And while I served in California as a small business advocate, I saw in real stories how businesses were being so agile. I want the SBA to be the same way.
And so across all of our programs, including this American Rescue Plan and all of the Restaurants and Stages program, we've tried to commit to that customer-first approach that small businesses have to constantly live by, as well as leveraging technology and ensuring equity across our program. So I think what's different now is that there's a heightened sense of urgency that we need to bring equity to our programs. We need to understand where businesses are at and meet them where they're at to better serve them.
ADAM SHAPIRO: But part of that is helping businesses which might be run by people who don't have citizenship. Is that the right way to say it? I mean, there have been changes to assist small business that helped the economy. Can you help us understand that aspect that's gone into place?
ISABELLA CASILLAS GUZMAN: Well, we know immigrant entrepreneurship is strong in this country. We have made some changes, for example, on PPP, and perhaps Senator Cardin had referenced that earlier, where-- allowing businesses that have ITIN to-- to apply for PPE. So it's important for us to serve all of our businesses.
We know they all add to their economies, their local communities. They enliven main streets across the country, as well as deliver the products and services that we depend on. And so our focus is on making sure that our economy can recover and those small businesses do that best with job creation.
ADAM SHAPIRO: Just for those of us who are not part of the government, ITIN, is that a classification? What does it mean?
ISABELLA CASILLAS GUZMAN: It's the tax ID number that businesses-- that perhaps immigrant businesses owned-- owned by immigrants would have in order to access and have a unique identity to be able to apply for this program.
ADAM SHAPIRO: And I think it's important for people to know that this is money that's going to taxpaying businesses, because some people might attack this kind of assistance that helps the overall economy. What surprised you about how the previous administration was administering PPP, whether it's good or bad? What kind of surprise did you have, if any?
ISABELLA CASILLAS GUZMAN: I think overarching what's important to note is that now in our final days of PPP is that we've been able to assist a lot of small businesses across the board to stay alive, to survive during this time with this important relief. We're still in that disaster and responding and helping businesses survive during this time. I think across the board, we know that we need to get better about our distribution and make sure that we're able to reach businesses, which is what we've been prioritizing over the past few weeks.
ADAM SHAPIRO: And as we start to wrap up, what message do you have for small business owners who may be watching us right now?
ISABELLA CASILLAS GUZMAN: Really that the SBA is here to help. We know you need a team. We have technical assistance advisors on the ground in communities across the country, as well as assistance for accessing capital investment, access to markets, including the federal government marketplace or international trade.
And I think more than anything, we are the advocates and the voice of small business, the 30 million small business and innovative startups across the country. And we want you to feel like the giants that you are in driving our economic growth. And we're here to support that growth.
ADAM SHAPIRO: My last question, what's made you the happiest or proudest about the way the federal government is now responding to help small business?
ISABELLA CASILLAS GUZMAN: I think across the board, my team that has just been working around the clock to deliver this as efficiently and quickly as possible and in a way that is accessible to so many has really impressed me. We have a lot of mission-focused civil servants and folks just serving small businesses.