Small Business Group: $150,000 Cap on EIDL Loans Imperil Small Business Owners’ Ability to Survive

Statement by Shaundell Newsome, Co-chair of Small Business for America’s Future and Chair of the Las Vegas Urban Chamber of Commerce, about the SBA’s shortsighted $150,000 cap on Economic Injury Disaster Loans

Washington, D.C., Aug. 3, 2020—For nearly seven decades, the Small Business Administration’s disaster relief program has helped companies recover from catastrophes, but during what is no doubt the biggest and most widespread small business disaster since the inception of the agency, it is putting restrictive $150,000 caps on its disaster relief loans even though the program has handed out less than half of the $360 billion it can lend.

During a time of crisis for small business owners and the employees who depend on them to earn a living, this decision is incredibly discouraging and shortsighted. It’s baffling that the administration would cap disaster loans to small businesses that employ nearly half the American workforce and drive economic activity in every community across the nation. Normally, these long-term, low interest loans can be up to $2 million. During the pandemic, when small businesses need all the help they can get, these loans are a source of crucial low-cost capital that businesses will need to survive.

It is mystifying that the SBA has resisted explaining why it set this cap and is not revisiting the policy to improve it. Although it is par for the course for an administration that has been uneven and shortsighted in its small businesses response throughout the crisis. The administration has not created a national plan to reopen, it has bungled small business relief packages leaving many underserved entrepreneurs behind and it politicized the wearing of masks, putting millions of small business owners and their employees at risk. 

Congress must step up and pass legislation from Sens. John Cornyn and Jacky Rosen providing the SBA with billions more for its Economic Injury Disaster Loan program and prohibiting it from capping those loans at less than $2 million.

The administration is failing to  stand up for small business so Congress must do so before it’s too late.