REP LIEU LEADS 27 MEMBER LETTER URGING SBA TO ALLOW COVID EXPENSES THROUGH LOAN PROGRAM

July 10, 2020
Press Release

WASHINGTON - Today, Congressman Ted W. Lieu (D-Los Angeles County) and 26 Members of Congress urged the Small Business Administration to issue clear guidance that recipients of Economic Injury Disaster Loan (EIDL) loans can count expenses for COVID-19 safety compliance—specifically the CDC recommendations for businesses—as working capital expenditures. As small businesses around the country begin modified re-openings, many responsible owners are working hard to follow public health guidelines and take the necessary measures to ensure the health and safety of both their employees and the patrons. However, SBA has not provided clear guidelines as to whether EIDL funds can be used for things like plexiglass dividers, which more businesses are using to reopen safely.

In the letter, the Members write:

Dear Administrator Carranza:

Thank you for your work assisting small businesses during this extraordinarily difficult time. We understand the challenges posed by the magnitude of this unprecedented crisis and subsequent scale of the congressional response. Your leadership and the work of the Small Business Administration (SBA) are deeply appreciated. 

We write to you regarding the Economic Injury Disaster Loan (EIDL) program. As you are aware, the EIDL program has served as a lifeline for millions of small businesses during this pandemic. Thanks to the low-interest, long-term federal disaster assistance, some businesses are able to stay afloat, and some are even beginning to rebound. 

However, we have heard from many small business owners who have applied for EIDL funds that they are either hesitant to itemize working capital or reluctant to use approved loans for activities adhering to Centers for Disease Control and Prevention (CDC) health and safety guidelines as they begin the process of reopening their businesses. According to the COVID-19 SBA Disaster Assistance website, the loan funds can only be used for working capital expenditures such as fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. To further complicate matters, there is no clear definition of working capital eligible activities written in current SBA regulations or SBA Standard Operating Procedure (SOP) that explicitly includes safety measures. 

Congress intended to provide federal loans to small business owners so they can retain employees on their payroll and, in possible scenarios, bring them back to work. It is imperative that these owners have the ability to use EIDL loans toward safety and mitigation activities such as purchasing personal protective equipment, touchless point-of-sale systems, and glass partitions to ensure the health and safety of their employees and customers.  

To that end, we urge you to issue clear guidance in official SBA documents, either in the SBA regulations or SBA SOP, that expenses to implement CDC COVID-19 recommendations for businesses and workplaces should be considered eligible working capital expenditures.  

Thank you for your attention to this matter. We look forward to your response.

Sincerely,

Ted W. Lieu
Member of Congress

 

READ THE FULL TEXT OF THE LETTER HERE

 

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