Congress Grills SBA Head On SVOG Delays As Stakeholders Plead For Promised Aid

The hearings were titled “An Examination of the SBA’s COVID-19 Programs” with the U.S. House Of Representatives’ Committee On Small Business; “The Pandemic Response and the Small Business Economy: An Update from the U.S. Small Business Administration” with the U.S. Senate Committee On Small Business & Entrepreneurship. There was also a separate hearing on May 27,  “A Review of the SBA’s COVID-19 Program” with the House Committee’s Subcommittee on Oversight, Investigations, and Regulations.

The May 26 hearings mostly consisted of legislators posing questions to Guzman, since Secretary of the Treasury Janet Yellen was not in attendance. Chairwoman of the U.S. Committee On Small Business Nydia Velazquez noted Treasury Secretary Yellen’s absence in her opening remarks, saying she was “in complete disregard for the law, which requires her to [attend],” and adding that “without her at the table this committee cannot properly fulfill our oversight responsibilities to American taxpayers nor the nation’s entrepreneurial committee.” She concluded her remarks on the matter by stating that another committee hearing date would need to be set “in the near future,” that would see both Yellen and Guzman in attendance. Numerous representatives echoed Velazquez’s sentiments of extreme frustration with Secretary Yellen and stated that she was in violation of the law.

The content of both hearings was broad, discussing concerns with fraud and abuse, particularly with the EIDL loans program, as well as concerns with the Restaurant Revitalization Fund and the SVOG program. 

Guzman opened her addresses to the Senate and House Committees by saying she was proud of her team who, “despite having had to scale at such a high intensity over the past 14 months,” has been working “around the clock to deliver the American Rescue Plan’s crucial relief programs” to ensure the survival of small businesses after such a period, citing the SBA’s particular successes in helping women and people of color. 

During the first House committee hearing Rep. Blain Luetkemeyer (R-MO) said that a lot of money had been allocated to these programs to make sure the aid was provided in a timely manner and told Guzman he had serious concerns’ about the SBA’s communication, a sentiment that was echoed by Rep. Roger Williams (R-TX), who said he had continuous communication issues with the SBA under her watch that were not improving. 

Williams noted that funds for the Restaurant Revitalization Fund were made available to recipients within seven days of application, asking why SVOG had not yet delivered any funds. Guzman responded that separate teams within the SBA were handling the separate programs, with SVOG being handled by the SBA’s Office of Disaster Assistance, while the RRF was being handled by a different office. She noted early technical issues in the application process, that the SVOG program was much more complex, and that the RRF was written based on what was learned from trying to implement SVOG. 

Guzman did note that she does not expect the SVOG funds to run out, as was the case with the RRF.

Several hours later, during the Senate hearing Guzman said that the SBA had “started to make awards” for the SVOG program, and later responded to a question from Sen. John Hickenlooper (D-CO) by saying that “any initial challenges with accessing tax information have been overcome” and collaborating with the Department of the Treasury had led to initial awards being made and that they are “feeling good about the program and our ability to start dispersing awards soon.” When Sen. Hickenlooper asked about a timeline related to the second tier of loss (70% or greater after the pandemic) Guzman said “There’s definitely learnings and efficiencies we try to leverage. Of course, each of these applications is complex to review from our team and we do follow a rule of two as well, so we will try to work as quickly as possible to get to those applicants in the pipeline.”

Following the May 26 hearings, the National Independent Venue Association, the National Independent Talent Organization and several other stakeholders wrote a letter to Gene Sperling, American Rescue Plan Coordinator and Senior Advisor to President Biden, reading, “We heard Administrator Guzman testify that SVOG awards started going out this week, and look forward to independent venues and promoters hearing directly about awards from the SBA. The emergency relief can’t come soon enough and we’ll be incredibly grateful when it starts flowing.” The letter also emphasizes that the funds from the SVOG program are desperately needed immediately as the industry begins to reopen. 

At publication time, after Guzman’s testimony on May 26, Pollstar was receiving word that some SVOG applicants were beginning to receive notifications that their SVOG applications had been approved.

In addition to questions about specific programs legislators during both May 26 hearings asked about SBA loans to nonprofits like Planned Parenthood, to which Guzman consistently responded that it was SBA policy not to address specific borrower information in such hearings.

The May 27 hearing looked more specifically at the SVOG and RRF programs. It featured several restaurant owners and Esther Baruh, Director of Government Relations of the National Association of Theatre Owners.

Baruh noted the voluminous paperwork required for SVOG funds would make it “virtually impossible” for fraud to take place, but could also lead to many mistakes. She said applicants had little opportunity amend their applications and urged the SBA to allow appeals if mistakes were made on the initial applications. She also encouraged the SBA to move quickly on the supplemental grants process.

You can see the full recordings of the hearings below:

The Pandemic Response and the Small Business Economy: An Update from the U.S. Small Business Administration

An Examination of the SBA’s Covid-19 Programs