House Oversight Committee Discusses Importance of EIDL Loans for Small Business
The US Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin has issued a statement on the SBA’s disaster programs and loans for small businesses.
Titled, ‘Oversight of SBA’s Office of Disaster Assistance,’ the statement discusses the important of EIDL loans for small businesses.
House Oversight Committee Discusses Importance of EIDL Loans for Small Business
The Small Business Administration (SBA) COVID-19 Economic Injury Disaster Loan (EIDL) was established to support small business owners in all US states during the pandemic. It was designed to help small businesses meet financial obligations and operating expenses that could have been met if the health crisis had not occurred. The EIDL program provides both loans and ‘advances’ to small business that are eligible.
In the statement, Cardin spoke of scale of support the EIDL program has provided to small businesses during the past two years.
“Over the last two years, the SBA’s attention has largely been focused on supporting small businesses through the pandemic. EIDL has provided loans to nearly four million businesses and served as a lifeline when credit was not available from other sources.
“The program was critically important during this pandemic, and it worked.”
Fraud Issues with the EIDL program
Whilst successful in giving small businesses a vital lifeline during times of hardship, the EIDL program has not been without fraud.
The Senate Committee on Small Business & Entrepreneurship Chair spoke made reference to the issues the loan program has faced.
“While the program has had its share of problems, including wide-spread fraud in the early months of the pandemic and poor communication with applicants, particularly during the program’s final months, its importance for small businesses cannot be overstated.”
Rebuilding in the Wake of Natural Disasters
Ben Cardin went on to talk about the role the Office of Disaster Assistance plays in helping communities rebuild in the wake of natural disasters. The Office of Disaster Assistance’s aim is to provide low interest disaster loans to businesses to replace assets damaged or destroyed by natural disasters.
Cardin noted the rise in natural disasters and the devastating impact they can have on small businesses and communities.
“This hearing is an opportunity to discuss the Office of Disaster Assistance’s traditional role, which is to help communities rebuild in the wake of natural disasters. Due to the effects of climate change, natural disasters are becoming more dangerous, deadly, and frequent in every part of this nation.
“In the southern states, what used to be once-in-a-century hurricanes and tornadoes are devastating communities and causing billions of dollars’ worth of damage every few years.
“In western states, there have been life-threatening heatwaves, crop-killing droughts, and historic wildfire seasons in just the last three years.
“And in my home state of Maryland, a single town—historic Ellicott City—suffered two devastating flash floods in two years.
“So, as we discuss the Office of Disaster Assistance’s procedures this afternoon, we must keep in mind that the SBA’s disaster loans to families and businesses will continue to be among the most important federal resources available in the wake of a disaster,” he continued.
Quicker Businesses Access Capital, the Better
The US Senate Committee on Small Business & Entrepreneurship Chair advised that the faster communities and businesses can access capital in the wake of a natural disaster, the quicker they can go about reopening their business.
“For small businesses, how quickly they receive a disaster loan could be the difference between a swift reopening or closing their doors for good.
“Small businesses are the growth engine of our economy and they are where we create jobs, but they do not have the same resiliency and the same deep pockets that larger companies have. So, when a natural disaster occurs, they are much more vulnerable and less likely to make it through that disaster,” he said.
Ben Cardin added that has the COVID EIDL program continues to wind down, the SBA must learn from the experience during the pandemic to make even more improvements.
“Associate Administrator Sanchez, I am looking forward to hearing more about the consolidation of disaster lending functions into the Office of Capital Access that was finalized last week.
“I hope this change will address the wide-spread customer service problems that we saw in the COVID EIDL program over the last two years,” he said.
For small businesses, it is vital they are aware of the financial support available to them through programs like the EIDL when natural disaster occur.
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This article, “House Oversight Committee Discusses Importance of EIDL Loans for Small Business” was first published on Small Business Trends