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SBA loan programs are in disarray, and businesses hurt by COVID-19 need fast cash, says senator

SBA loan programs are in disarray, and businesses hurt by COVID-19 need fast cash, says senator
[Photo: harmpeti/iStock]

Almost a month after being ordered to shut down—and almost two weeks after the federal government passed an aid package of unprecedented proportions—many small businesses affected by the coronavirus pandemic say they still haven’t received a dime.

And time is running out. The Small Business Administration, which is tasked with facilitating the loan programs that are supposed to be helping small businesses, has been overwhelmed with applications since the end of last month, and many businesses say they have yet to receive emergency advances on loan grants that were supposed to be delivered within three days of a business making a request.

For companies in dire straits, the situation is increasingly untenable, and some members of Congress are finally starting to acknowledge that businesses will close forever if the chaos doesn’t end. Democratic senator Ron Wyden of Oregon today called for “cash assistance” to be included with the next package of coronavirus-related relief.

“Demand for loans under the CARES Act has been enormous, but getting that funding out the door has turned out to be a bureaucratic train wreck for banks and the SBA,” Wyden said in a statement. “Without additional action, I fear that many small businesses won’t open their doors again. Small businesses need an influx of cash, plain and simple. They don’t have the cash flow to survive for more than a month or two, and many may not want to take on more debt.”

Wyden, a ranking member of the Senate Finance Committee, introduced legislation in March that would provide businesses with up to $75,000, depending on their revenue and number of employees. In his statement, he said he’s going to “push hard” to get his proposal into the next COVID-19 relief package, which would be the fourth since the pandemic began.

Lawmakers on Capitol Hill have not provided a clear timeline for when, or if, they’ll pass more coronavirus-related relief.

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