SBA asks for more emergency loan seekers, after dozens of business owners turn down
Before the pandemic, Dana Glosson and her husband Toby earned about $ 170,000 a year from Georgetown material hauler, Glosson Enterprises. But in May 2020, Toby caught the virus and spent months in the hospital. He died three months later. Before the pandemic, Dana Glosson and her husband Toby earned about $ 170,000 a year from Georgetown material hauler, Glosson Enterprises. But in May 2020, Toby caught the virus and spent months in the hospital. He died three months later.
Toby was still the driver, while Dana was the accountant. Now that she’s on her own, Dana, 57, has created a new business plan to buy a modified van so that she can be a medical transporter. She applied for a low-interest loan of $ 218,000 from the US Small Business Administration’s Economic Disaster Loan Program, created to boost small businesses and nonprofits that experience loss of money. COVID-related revenues.
“It’s one after the other, and I can’t even lift my head into the water and overcome one loss to reach the next loss,” said Dana.
Almost a year after her husband died, her loan application was turned down. Last week, she started a remote customer service job to help her survive.
Glosson is far from the only one. There was a massive wave of rejections sent in July for the EIDL program with generic language that frustrated many business owners. They were told they could reapply, but were not told what to correct in their request.
“There is sadness in our government because it passed a law to make the money there, and why can’t they give it to people like me who have the motivation and a business plan ? ” she said.
The EIDL is meant to replace lost sales to new businesses, but that’s not the reason Dana was turned down. His request for an EIDL increase was sent in December and there is nowhere on the app to say how you plan to use the money. And since she plans to continue in the transportation business, this is not a violation of EIDL terms. Now she wonders what she did wrong.
Veronica Pugin, senior advisor to the SBA’s Access to Capital Office on EIDL applications, said the loans were turned down for a variety of reasons, including failure to meet credit score requirements or errors on creditors. requests. She said the agency was working to provide more details in future rejection emails to applicants.
“We noticed that a lot of applicants were looking for a more detailed explanation than the broader category around unverifiable information, so we’re going to make an improvement on that,” she said. The SBA has “a lot” of funds left in the EIDL program, and business owners with 500 or fewer employees can apply until Dec. 31, Pugin said. Small businesses make up 99.9% of U.S. businesses and employ 47.1% of U.S. employees, according to the SBA.
In June and July, the main complaint about the program was that applications were not being processed quickly enough, given that it was “emergency” funds for struggling businesses. The SBA has since hired more staff and increased training at all levels, Pugin said. The agency went from less than 2,000 requests per day on June 28 to more than 37,000 requests per day on July 28.
“With this expedited process, you’re going to see a higher volume of approvals and denials,” she said. Nationally approved EIDL loans reached $ 3.8 million for a total of $ 258.5 billion on August 19, the last time the data was updated. This includes 326,330 loans approved in Texas, for a total of $ 22.2 billion. The SBA did not know how many loans were turned down.
Connecticut consultant Trevor Curran called the massive wave of loan denials “utter shame” because it looked like the SBA had swept a load of files into the trash when it changed the internal office to review new demands. The SBA should have let the new team review the applications instead of turning them down, said Curran, who runs Aurora Consulting with his partner, Linda Rey. They help business owners apply for EIDL loans, each charging up to $ 2,500.
The reasons given – “unverifiable information” or “unfounded economic harm” – are “insane and leave candidates ashamed and scratch their heads,” Curran said. In one case, a request he submitted for a client was refused for “inactivity and lack of interest from the requester,” even though he says he responded to every SBA request within hours. The SBA has touted the improvements to the program, but Curran said these are “minimal at best.” There was a day in late August when the SBA portal was inaccessible, he said. There has been some increase in responsiveness to requests. But there’s always a backing of loan and reconsideration requests “languishing” in the SBA’s processing systems, Curran said.
Summary of the news:
- SBA asks for more emergency loan seekers, after dozens of business owners turn down
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