Transcripts For CSPAN2 House Hearing On Small Business Loans COVID-19 20240712

With a video connection please keep your camera on. If you go to another proceeding please exit this one on we will recognize each member in the time slot provided during the preceding. And with the next appropriate spot for the remainder of their time once the issues have been resolved. During testimony as staff address the technical issues. I may need to recess the proceedings for the witness to reconnect and finally remember to be muted until you are recognized to minimize the background noise. The House Resolution 965 if there is too much background noise should a member want to be recognize they must unmute themselves at the appropriate time. We are also following the health and safety guidelines issues that include social distancing we urge members on staff to where a mask at all times and thank you for your commitment to a safe environment for all who are here today. Last night on the eve of the date the Paycheck Protection Program expires the Senate Passes a bill from the inception of the program that until we know where the money is going are very Small Businesses which are Sole Proprietors and then to to see the advice from micro lenders. And with that regular disclosure to the public and then with the next steps for ppe and the secondary loans as i have said all along i invite the senate and the administration to sit down with us and discussed extending ppe loans and by members of this committee we are meeting today to conduct an important hearing on the sba implementation or as some call it the Title Program which was updated march 12 the first Economic Relief program to assist Small Businesses impacted by the coronavirus pandemic thank you to the associate administrator of the sba office for being here today to discuss many of the issues surrounding implementation of the program. I fully understand the efforts put forth to respond to this unprecedented crisis however we are holding this hearing today because of some very concerning issues of thousands of Small Businesses we held a hearing last month about experiences with the program. One Small Business owner has a negative impact of the reductions of the maximum loan size 2 million at 150,000 costing more than 90 percent. He like thousands of Small Business owners across the country were drawn to the Title Program with the ability to use the loan so imagine thinking this program that sba had drastically reduced the loan amount this is the information they should convey ahead of time this is fundamentally different for those who need it for an amount greater than 150,000. It is irrelevant throughout the process fda shows a lack of understanding of the Small Businesses related to covid19 especially with the onesizefitsall 150,000 loans to find an opportunity to apply for a second loan or with additional funding Small Business is looking for help and take it or leave it and then told you have a nice day. We also heard from the community in south philadelphia they were denied due to Credit History. This is a lifelong entrepreneur who had struggled with the additional burdens due to covid19 borrowers like the Community Pharmacist to have been denied for unsatisfactory Credit History has reported that credit threshold for approving loans is not clear and borrowers do not know what the limit its. Leaving then feeling a decision is arbitrary. Im sure it would be helpful to all of the sba simply communicated that credit minimums up front i have also heard from Small Businesses who were denied because of the verifiable information meeting on meaning there were items that were reviewed that the denial letter never details the information missing leaving applicants with little insight as to why they were denied. These decisions can be appealed but only after delays and expenses. The businesses need relief and they need it now even more troubling that the sba has not communicated well with applicants nor provided them with a reliable way to check the status of their application. Borrowers are simply told the loan is processing the only other update they receive is whether the loan has been approved or denied applicants dont get to know where they stand on this issue so they know how much longer they must wait before receiving financing. Given the current economic climate if they will be denied they need to know quickly so they can explore options for capital elsewhere. Finally there was a long period with which the application was limited to Small Businesses which is completely at odds with the intent of the Small Business act and the sba witches to protect those of all Small Business. It is particularly troubling to have heard allegations that these loans were process before other applications already in the queue and we hope to get a clear answer on it today. As they continue their oversight duties, i am looking forward to hearing from mr. Rivera how many are pending in the queue, how much more funding is necessary and what the sba is doing to ensure Small Businesses across the country receive the Economic Relief they need to survive. Already those declaring bankruptcy due to covid19 an expert say its not long before the bankruptcies hit the Small Businesses. We need to be doing more to help assert this outcome i look forward to hearing from mr. Rivera in response to covid19 and what they need to fully implement the program i now yield to the Ranking Member for opening statements. Thank you. Thank you madam chair and for holding this meeting on the sba Economic Injury Disaster Loan Program also known as the idle program. At the beginning of the year, the nations economy in the country Small Businesses reaching new heights experiencing historic levels of unemployment, and momentum with building. For example unemployment among africanamericans and Asian Americans and hispanic americans were at alltime lows that more and more people were working. That was a good thing unfortunately covid19 made its way to our shores and as a result a huge number of americas Small Businesses coasttocoast were forced to close their doors and turn off the lights. Smallest fiy setting up the Paycheck Protection Program, which works in partnership with private lenders to deliver funds to Small Businesses. This program is delivered 4. 8 million loans in the amount of nearly half, actually over half a trillion dollars now. The sba also continue to administer the Economic Injury Disaster Loan Program for chad its roots as a post event Recovery Program for businesses and communities that were hit by a Natural Disaster. Both of these from the beginning of the crisis experienced overwhelming unprecedented demand. This strikes a particular locale to a fullfledged National Relief program. I would like to thank the sba for being a vital resource to the businesses, entrepreneurs and startups. However, we are a number of months into this crisis now and the program has a lot of room for improvement. While they are being processed and the advanced grants are being dispersed, too many Small Businesses are left with questions on communications, questions on the status of their loan and surrounding the maximum amount under the program. With the Small Business owners are left with limited information, the everyday Business Decisions become difficult. They must strive especially during these uncertain times. I look forward to getting to the bottom of many of these questions determining how we can Work Together to provide solutions for the nations smallest firms. I want to thank the associated minister for the office of Disaster Assistance mr. James rovira and i look forward to the testimony. Also obviously answering questions from the members on a both sides of the idol. As was the case prior to the outbreak, i know that Small Businesses will once again be the nations Guiding Light and with that, i will yield back. Each witness will have five minutes to provide a statement in each Committee Member will have five minute for questions. Please ensure that your microphone is on when you begin speaking. With that i would like to introduce the associate administrator for the office of Disaster Assistance. In his capacity, he directs the Disaster Loan Program. He began his career in texas in 1989 serving as a disaster loan specialist. Over his career hes also served as the associate administrator for the office of Financial Assistance prior to his Public Service he was a commercial loan officer in the private sector. Welcome back to the committee and you are recognized for five minutes. Good morning, chairman, Ranking Member and members of the committee. Thank you for the opportunity to update you on the Disaster Loan Program and the response to the pandemic. In march, they worked all states and territories to facilitate approval of 56 disaster declarations for Small Businesses affected by the pandemic and at that time the administrator made an important change to ease the Business Impact certification. This enabled them to provide disaster loans for Small Businesses in all 50 states and territories and established a nationwide Disaster Assistance program. As a result, the numbers and dollars are experienced unprecedented so far. This agency provided Economic Relief to 6. 8 million Small Businesses for over 147 billion. That is more than double the amount provided in the entire 67 history of the agency. To help achieve that they created and implemented an entirely new online portal application Distribution System for the loans and grants. The system has handled over 8 million applications and allows us to distribute dollars to those businesses in record time. We are processing grants in less than two days. The pandemic in the program has also required the agency to scale up the disaster staff and now totaling over 7,000 personnel. Meanwhile, the Program Continues to service 175 other disaster declarations which total of billion dollars of Natural Disaster this year including request from governors have assisted in the areas of civil unrest. These are parallel for the agency and havent been without their challenges. However, let me mention a few. First between march and the end of april the agency had to stop processing applications three times. This was due to the Program Changes made through the act legislation, the lack of funds and the need to stand up to the grants. The agency received close to 4 million applications in the two week period and they set us back and weve been working hard to catch up since. Moving quickly to build a new system they were not able to provide the same visibility as exists in the disaster loan application portal, this is with the volume mentioned above resulted in uncertainty for many. Following the exhaustion of the funds, the agency learned how to maximize the dollars for the applications. Newly eligible businesses in future applicants in reopening the portal two weeks ago. We also need to keep in mind that the application period has defined runs through middecember. With regards to the grants, the agency consulted bill authors and through a per employee allocation we have been able to reach 2. 2 million more with financial aid. I mentioned the Significant Growth in the staffing but that comes with the need of educational training. We adjust to the demands in the callcenter and low Processing Centers and highlighting the success reflecting the challenges its also important to evaluate where we are today. We have been continually processing loans for two months. Applications have not been initially positioned, all advances have been distributed and processing times due to volume and stoppages averaged around 41 days. Since we reopened, the processing times for new applications are now five days. We are much stronger and in a operational staff level today and Small Businesses are getting the needed dollars disbursed to them in record time. At the sba, the mission is one service. We have a proud history of helping Small Business owners and thintheir time of need. Every disaster is unique and there are always Lessons Learned. While facing a situation like unlike any in history copy had to do this while updating in a virtual environment ourselves. And we also had not been affected by the pandemic having lost one of our Staff Members to the virus. We will continue to work closely with you to achieve that goal. I recognize myself for five minutes we received approximately 2. 7 billion in funding. To fulfill your mission, other Agency Programs are struggling Small Businesses. What portion was allocated to the office of Disaster Assistance and how much has been spent in has been the biggest cost drivers . Weve received two sets of funds rate eased 7 million initially in our existing debt carried over on the long side and administrative side major cost to answer the question, we have 7,000 employees and close to 2,000 contractors. They are running a 24 7 operation of a call center so a lot of these expenses weve not had a Natural Disaster have grown exponentially. So, you hired more staff and contractors to help you perform the duties to the office to get that money to you ive been in this committee for 28 years and i know every time there is a Natural Disaster how bad the agency has failed because the budgets of consequences and pretend the budget is passed is going to be reduced to of course we provided the money to hire more staff and contractors those are issues we need to keep in mind because the Climate Change isnt going away. I have heard complaints about the sba for Customer Service. If only to be told that the applications were pending. Why were they unable to provide more detailed applications through the process . Restarted the system that we respond weve got the first two to three weeks when we received the opportunity to do the Grant Program but they never had in the disaster loan side, we pivoted to the contract that weve received of the contract that enabled us to rebuild it in looking back we should have had visibility, no doubt about it because we had with previous disaster loan application portals. What happened to get this service out and get to the new portal we didnt have this ability. Once we get invited into the loan or the grand, there is visibility that in hindsight we should have added that. They said that it was working to add more. When will that be completed fax everything has been processed and we have received close to additional 2 million, 2 million loan applications. There is visibility from the perspective. So why then did they say there was more stability . We assist the applications they eliminated the loan to 150,000. What percentage had requested should have received more than 150,000 clicks we currently run 80 of the applications below 150,000. Can you answer my question, the percentage that applied for 2 million but didnt receive it and got 150,000 . We determine Economic Injury. You can request whatever you want based on the working capital and we could have done a better job communicating its not based on whether the loan amount you are requesting. Its different than the Traditional Bank loan in the perspective. My time has expired and i now recognize the Ranking Member. Ive heard from many Small Businesses and numerous members of congress about the lack of communication coming from the sba with regards to the Article Program specifically. How can we make sure they receive the most uptodate information and are there any programmatic changes that we need to consider . The last three months its been a tough road obviously. This is a national footprint, its not the regional disaster from that perspective. We learned a lot and we need to do a better job we definitely want to work with you on that. Do you believe the private lenders could have a role within the Disaster Loan Program. Let me state what we are doing. Weve used the contract. Basically this company is doing with the private lenders are doing. They are processing the loan for us under the traditional goal is to loans per day under this contract we are using where we have the business doing this Bank Business to process the loans they couldnt have processed on the existing platform. Thats why we stopped for two weeks and we felt this portal with the institution and thats what has enabled us to do that. Moving forward, this is the path forward. Its increased a cycle of times with the productivity that helped us provide faster servi service. It tends to be less efficient because we dont compete with others and thats sped up the process. We started to see some businesses return under the modified operations. Congress is debating the federal governments nexfederalgovernmet pertains to this emergency. To ensure that it assists the applicants and how can we structure the program to be flexible and nimble when the next disaster strikes . From the perspective of what you enable us to do there were statutory requirements. We didnt have to get federal tax returns from that perspective, so you have been very helpful in this process. As we look at the volume in relation to what we processed we continue to have that discussion as far as other opportunities that we may have. How should we measure the effectiveness . I wish i could approve every load. The current Approval Rating is 50 . One of the things thats different is we have a sign we are able to disperse the next day. Under the traditional process that takes two to three flipping paper back and forth with the Small Business. Now we are 99 of disperse so of the 131. 9 billion we have approved the already disbursed 130 billion a. There is a turnaround from that perspective so its been positive. That is one of the Lessons Learned from the Technology Perspective using the algorithms and those type of features. We need to figure out how to better improve. Many of them receive grants. The advance from that perspective, but we are going to come out with less and we will be sure to share that with you when this ends and we can move on and look back from that perspective. Thank you and my time is expired. Time is expired and now a ms. Davis is recognized. Thank you for holding this hearing today. The economic Disaster Loan Program is meant to provide an immediate lifeline to the businesses that are struggling in the corona virus pandemic. Ive heard from too many Small Businesses experiencing the delays and lack of transparency. Thank you for joining us today. As i heard from my constituents and witnesses reference to the frustration, i am curious about whether or not you are working to provide more stepbystep applicatioinformation for applid whether or not they were going to be able to have more frequent and open Communications Going forward. Talking about the technological and operational work that you are doing, i am curious what that is going to look like going forward. We have one to 2 million individuals that continue. We are leaving messages and if i could fast forward to today, we are better operationally tha the were 90 days ago when we were standing up. Looking back we should have probably had Better Communications and been more transparent when it comes to the ten steps in the process. That is the kind of tactical approach to the local District Office an in the kansas city natural area has done a great job of outrage and im curious to we work very collaboratively with those operations as far as communicating back and forth with us. Its whos been receiving the various loans and grants. I appreciate your work and time today. With that, i will yield back. They hold a hearing with all of our partners and they mentioned that they learned of changes made by the sba on rules and guidance in the media so you need to have better coordination with the partners in the field helping them into providing information to. Sometimes people go to the media before we get the opportunity to get to the Resource Partners and we clearly understand. So the gentle lady from america is recognized for five minutes. In the relation. What do you think that members of congress should focus on within the program . Regarding these applications, we processed those conquering play. We sethe way. We set up a current queue of continuing to process the loans in the q. And a different track for the Agricultural Enterprises so they were being processed competently. We know from that perspective. What could we do different as i mentioned earlier the ability to not have to get federal tax transcripts from that perspective, a lot of those improvements have been phenomenal and have enabled us to have a cookiecutter approach to get this assistance out as soon as possible. Do you believe that there is room for the private lenders to offer great . We are using a private Sector Organization that had a search contract where you go to the website and they do the algorithm with all of the data that they are completing and they bring it down for a loan officer to do the decisionmaking. Had we not had that relationship or that contract, we wouldnt have been able to process those 25 loans on average. We would need probably two to three per day which is not acceptable. So, we do take advantage of these opportunities with these private Sector Organizations. We had a. I will yield back the balance of my time. The gentle lady yields back and now we recognize the gentle lady from california. They provided 25 million for the sba resources [inaudible] if the fda doesnt fulfill, they risk being left [inaudible] with limited english proficien proficiency. Can you explain what steps your office has taken to ensure it is accessible for the Business Owners with limited english especially considering we provide 25 million in the english language is . Thank you, congresswoman. We translated the fact she into 17 million languages 17 languages and when it came down to the Language Services we had a 2 milliondollar contract to. We havent heard anything from the perspective when it comes to being able to translate. We do understand that need. Its still in english and we have an application in spanish. We will continue to try to figure out how to get more language as we proceed from that perspective. I would urge you to translate those applications. How do they ensure the Sole Proprietors to made available during the crisis [inaudible] would work in concert with the Paycheck Protection Program it was provided a quick injection of the operating expenses and enabled businesses to maintain a. A. Its a rather shocking decision with just 1,000 per employee a year specified in your testimony that in order to make money off of that how do you think that they value by 90 of the independent contractors as Sole Proprietors to meet these types of Business Owners . We put a lot of analysis into these determinations and decisions at the agency level the decision was to do per employee. He received a thousand dollars grant. Had we used 10,000 we would have been out of the funds immediately. We did it the first 10 million then the subsequent dissembling. This morning i think it shows were at 15 or 16 billion. We would have run out of money and what they are doing basically is to provide as much assistance across into this kind of the approach we took. Why is it that they havent provide timely information . I have to get back with you and have a conversation with the administrator. I thought we were providing clear guidance and communications internally. As i mentioned earlier, the information we have internally sometimes gets out befor get oue able to distribute it to the entire resource partner perspective. Now we recognize gets asked by a colleague that i would like to expand on that a bit and continuing the question about the previous disasters as well as the floats across the midwest. Hurricane harvey and irma and 2017 weeks apart from each oth other. Can you repeat the last part of the question. For ones that of the population. I dont believe we did. We are working on two different systems right now and then this specific portal is to covid19 by itself. This is what a disaster loans this year so that continues to go business as usual. Followup to that where they were awarded was the ability to shut out applicants from the disaster in order for the others to have access to the fund is . Not that im aware of. They are 2 of natural disaste disasters. Both are home owners and people dont understand they gave the authority for the homeowners and then there is an Economic Injury disaster loan component. I am not aware but i can check back if there is a misunderstanding. What do you see old for the second . Is it related to the fact yes, madam chair. So hes asking you if they had been in the history of the program any time where one group is coming in and then shutting it for everybody else . They are applying for loans for farmers were not allowed because it was shut down for them. Congress gave us the authority to make loans to farmers. To every other borrower that were injured by covid19. But since weve opened it up since june 15, weve accepted the 500,000 applications. So they delayed. Do you realize how many were calling the offices of a and its clearly stated not for you but opened up for the agricultural. I apologize for not answering. I didnt understand. Thank you. I just would like to have a sense of why that happened. Why it was only open at the time the decision was to let them get in, we hadnt had authority for agricultural since the mid80s so we hav had to stp and retool the system there were some stops and goes. It hadnt been opened so we were not even eligible for a long time we might argue with that decision. I have people in my district that were wondering why cant we get this but that was the reason. This isnt my prepared question that i want to understand if you really believe that the agency could do better if the best response to the performance i thought a lot of businesses in my district i finally got a response that there was missing information on his application into the regional acting director in my office we were told that there was a 24 hour email Wine Congress members could use in order to to get a response. Nine days later we got the response to that email that says they were missing information so we could tell the constituents what information was missing or needed to help the application. They brought up the lack of communication but im just telling you in case no one else on your team is telling you directly to Customer Service levels from our constituents are facing is terrible in this program. And i understand. Ive spent 22 years working in business before i came to this congress and kennedy so i understand the volume and i understand you are under a lot of pressure to respond here. But six days ago, i spent a response again asking for someone, please to help this constituents, and im sitting here today and still we have no response. And i am a member of congress. I cant even imagine what is happening on a daily basis inside the Customer Service group. I just want to make sure no one is sugarcoating this for you because i am not going to sugarcoat this for the american people. The administration of this program has been absolutely terrible. I just want to say also that i understand this meeting is about idol and i didnt come here today i came here today to ask a question, but somebodys got to tell the truth about our constituents are facing. And i appreciate the hard work youve done, madam chairwoman to finally get a member of the sba to come in front of this committee. I sent a number of letters to the administrator, and i want to make sure that during this hearing i also have an opportunity just to say that the response on the program has been equally unacceptable. I understand that for the recent gao report, your administration waited until the last day to respond to requests for data to the Government Accountability office and told me h only replit had already been made public. Even to the Government Accountability office. We need a commitment to release a comprehensive list of firms that applied for and received a. We need to make sure that it is essential to receive these goods. Thats our role as members of he best job that we can to oversee the use of taxpayer dollars. I appreciate you being here today. I know this isnt going to be all that much fun, but i want to make sure you understand that what has been happening and theres been a lot of challenges, it is simply unacceptable. Thank you for your comments. I do not take it lightly when we are not providing the Customer Service that we need to do. We can talk online and see whatever the issues are. As i mentioned, this mornings report we did individuals on the long side. It was slower than before, yes but are we still getting we passed 7 million calls at the call center yesterday. A lot of work for a lot of individuals and we are doing the best we can. If theres opportunities on how to help us or how to get better service, let us know and we would be glad to provide that service. That is what i was told a month ago. I will continue to do my best. I dont know what else to tell you from that perspective. Thank you madam chairwoman. I will go back. Thank you, madam chair. Thank you for being here today and answering questions regarding the idol program. I always find it interesting when we complain about inefficiencies in the government and yet have colleagues who want to make it bigger its always been perplexing, but ive been around as you can tell from the few gray hairs in business. I cant think of any agency and business or government that has ever been efficient as compared to the industry that is accountable and directly to the customer for its existence. With all of that said, we have spent a lot of time, in fact all of our time today talking about the current history of the program and how it has compared to other programs involved in either 9 11 or geographies, disasters and things like that. I would ask you to compare those. Ive heard a lot of interest as it pertains to Business Interruption insurance and it is advisable for the National Pandemic or National Disaster versus the localized geography disaster. One thing i would ask you, and i think this could be a very bipartisan request that shouldnt be controversial at all and should give you a chance to perform at a very high level. This is very fresh and well. These coming from here and your Customer Base and people applying for the loan. Could you commit to us between now and the end of the quarter, so prior to any potential administrative changes, people running the agencies or whatever, can you commit about assembling best practices that youve learned from this. Its difficult and i know youve done it with your experience to take a localized disaster and extrapolate that across National Disaster. Have you tried to do that, you are a little behind the eight ball for the lot behind it in certain areas but it would be easy to take a National Pandemic disaster and localized it. If we could get from you a commitment from you that this hearing today you and your team could put together a playbook if you will for a simplistic term that would identify things you should do better like to you should communicate to and when you should communicate and why because we could all sit here and talk about learning as we did in the office of the 150,000 cap from the New York Times or the wall street journal or the washington examiner. We could all do these Different Things but it doesnt solve the problem or prevent them from happening in the future. We need the kind of skin in the game because then that kerry is on beyond the ideas and the things that are going to make it work in the future when this happens again and we hope its a long time and none of us were here when it happens again, but that is in the future for the second history matters. It matters a lot. It identifies what we shouldnt do it again and what we should be right next time. If you could help us put that into a format that could be given to this committee so that we can hold each other accountable and remind each other of what we need to be doing differently as we go forward, could you commit to that . Absolutely. September 30, 2020. Absolutely. And if i could just have like 15 seconds. You can have a minute and 44. Covid19 viruses were not in the Small Business act before march 15. We were not responding to this. We do have a playbook at the Disaster Preparedness Response Plan for Natural Disasters. I think that we have proven when it comes to this footprint, we have a 15 or 20 day response. Not in puerto rico. But if i may thought i would acknowledge that you have those and that is because people have to deal with recent disasters but now we have in our lifetime and legislative lifetime and in your administrative lifetime executive branch lifetime, you have a National Pandemic. We dont have that from 1918 spanish flu to rely on now because i would imagine many of the things we have in without the technology would do the same. We would be communicating in different formats that we have the ability to communicate and i had people calling me like many others did. I thought they were going to apply for a 2 milliondollar loan and go through the process and were told 150,000 in their mind they wasted a lot of time, they could have gone to having it set up their business quicker so there was a lack of communication which is usually what destroys most relationships and everything we do so if we could just get a communication process plan that again, and i took one minute and 20 seconds of your response time, but i am acknowledging that you have good regional disaster plans because unfortunately we have to deal with them time and time again it year after year. But it could be 20, 30, 40 years but we will go forever in the congressional records and possibly the legislation to process to handle the National Epidemics pandemics as we go forward. Thank you. And i will be healed. The gentleman yields back and now we recognize the gentleman from minnesota. Thank you madam chair. We know that the Small Business administration has really given a nearly impossible task. Overnight they were asked to assist every Small Business across the nation. I commend the work youve done thus far but there is a lot more to do. I do want to share some concerns that were brought up here earlier. It seems sba has taken some liberties to reduce the capitoll while giving from 2 million to 150,000. This is likely to ensure the maximum number of businesses receiving some sort of funding during the crisis, my constituents are rightfully upset and feel they are being cheated out of what they were promised by the government. With that said i will be focusing my line of questions on the portal. Can you share with us what you think the sba is reviewing exactly when an applicant sees, quote, processing in the idle portal . Sure. This is the first time because we used to streamline applications. We had identity proofed every Small Business that came in, so for example, the business name may not be the same as the name on your checking account. We identity proofed addresses and a lot of these processes. As we move to the Small Businesses from the application portal into the loan portal, that was a quick credit check based on the credit score and once you pass the credit score then we determined that the economic an entry six months of working capital that is what it was based on. Its pretty simple, sales minus the cost of the gross profit was. It is basically your load it from that perspective. The idle loan program is meant to pay for fixed operating expenses, it isnt for expansion but those were some of the requirements. With that being said what is the average time between the application being said that it had a decision being made . Currently we are running 41 days for the 5. 5 million applications weve process. So what is the parole that slows the process down from the time the applicant gets to the 41 days . Staff, the amount of volume, standing up to portal. We have stops in the process that havbuthave included the 41e run out of money and a 7 billion because the additional 50 billion from that perspective. We had to build a portal into a new application when we got the Grant Program. We had to stop and do a new application and we got the components so theres been pretty hard stops in the process. So, my colleague from minnesota brought up a good point. When you have an application and theyve waited days and days and they called and you said it wasnt filled out correctly, is there a faster way to do that immediately . So, we have learned a lot when it comes to filling out correctly. We were not requiring any other softer diligence. It was a required form from that perspective. And i need your help if you have examples of where you stay it wasnt filled out correctly. Im curious if you know what they are being asked for. They are very crisp and when we do the decision we do the position that we move on and they have the opportunity to conduct the reconsideration. Whawas the sba doing to make sure you have the most access to the information guidance in the status update of other Important Information during this economic downturn . Thats one of the things looking back specifically for the idle program. We didnt have a transparent portal for the Small Business owners as we do with the disaster loan application portal. Congress gave us that productive years ago so we built it so you can go in and figure out where you are not in the queue from the perspective. We didnt do that. In hindsight we should have and that is a Lesson Learned and we have. I appreciate you being here and taking our questions to be the goals when you, youd do better. This pandemic came to the shores through no fault of our own if we are going to get through this together but we need you and other members to really understand livelihoods at stake. Much of the economy is at stake and Small Businesses are the engine of the economy. We are going to need much more help. And i will yield back. The gentleman yields back and now we recognize the gentleman from florida for five minutes. Thank you madame speaker. I appreciate that. I would like to associate myself with any of the comments related to the conference and trusted communication. I will say in my district i got literally hundreds of calls with respect to the frustration Business Owners were having in getting information and not having questions answered and so forth about the status of their applications so i just want to reiterate that. We can do better and have to frankly. What is the current level of funding that remains of the program . We have 316 million we flown 130 billion. 230. Okay. Do you have any projections as to how long those resources will last . We do that in the house daily. We have a meeting with the chief of staff, the chief Financial Officer and operating officer theres a team of about 500 or 600 individuals and they do that daily. Its a queue of maybe 8 million we have room with 8 million at some point. Im not sure when, but they do that analysis daily. Your best guess is we are going to run out in a month or three months . I apologize. Im not in the guessing game of this analysis is pretty comprehensive. It contains a lot of factors. The approval rate, how many applications are pending. Lets go this route. At the current rate, what arent you extending them to per week . I can share this information with you we have had some big weeks. Last week we did 14 billion in approvals. Our biggest week was the week of may 31, 24 billion. By the way, katrina was 11 billion so there were two katrina is in a week. So, you know, i havent put the math on this but if you are looking at 200 something a couple of months over the last couple weeks or several in june have the number of loans extended, has it come down each week sex we have fluctuated between 200,000 of the week of may 31 and june 7200000. The week of june 14 at june 21 to 300,000 so it is pretty steady. One of the things that has been mentioned was the decision to count the amount of grants at 1,000 per employee. Why was that decision made in a second question, was that communicated to applicants and was it communicated to the members of Congress Prior to the decision being made . The decision was based on at the time we have 10 billion we had approved 4. 8 million applications, so we would need 48 billion we have plenty. We based the one to ten based on this Due Diligence we did a. Thank you. Good morning. I was on the floor speaking. Im sorry im just getting here and catching up. But i want to touch base. This has been a challenging time for the sba the last couple months i had a conversation monday with the administrator talking about the issues we are facing with the program. I have heard from so many people about the uncertainty with the Pandemic Response it has created so much anxiety for businesses if they can get through day to day and we piled on top of that with the challenges that we face with the loans. In my own district as an example be have a wonderful webinar those that are working so hard and bending over backwards they told our businesses they would have a decision within 21 days or the money within 21 days we gave a 10000 advance within ten days obviously that didnt happen. So what i start with is we are where we are. The 150,000, a change how that was let out june 30 it has come. How do we give our businesses the confidence the sba will give them the information . I can order a pizza and track it every step the know when it will arrive a business should have a similar sense of when they apply for a loan, how much they get and when. Take you for spending time with the administrator with the call on monday. Since we started this midmarch we are 41 days to fully process from that perspective. This morning i look we are processing loans in five days. Everything that has been processed from that perspective so i wish we could have been quicker and more communicative. This will come off more harsh than i mean it. But we did try to slam a lot through a small pipe in a very short amount of time but to be perfectly honest when i hear we are doing really well now that saying we got crushed at lunch three in the afternoon things will be fine but i know there is dinner our i know whence this money is consumed they will come back and need more help i am confident in a bipartisan way to help these companies what are they doing today to make sure when we get to the next rush we dont fall back into that timeframe . We dont consider this a wall right now we are working between ten and 12 hours a day and seven days a week. We learned a lot what i intended to say was we are a Better Organization today than when we started in midmarch. The system is working faster we have individuals in the queue, we have gone from 1000 employees up at 7000. Better trained and better prepared. Are there specific changes that you have to improve that . Are they completed or ready to go . From the perspective as we go through we have a different bill every week from that perspective so were in a good place right now we still have a lot of work. The things were changing week from week with the sba and treasury instructions were changing application one and application to if i keep my place in line if i do the first application and then the second. I know we have to be flexible and adopt with a dynamic but what confidence can you give every Small Business in this country the sba will provide stability and the storm . We pride ourselves on Customer Service that hasnt been with this 130 billion of two. 1 million and with the Small Businesses that deploy 11 Million People so could we do better . Always. Thats why we continue to have these such on the sessions to figure out the challenge to continue on. I dont want to question your intent i know how hard everybody is working. But at this moment and in this crisis we need the world from you. We really need the sba to step up and deliver. Now we recognize the gentle man from north carolina. Sometimes there are advantages to be dead last. And it benefits the dynamic and to have the interaction in person i want to thank joe on our Committee Staff enabling me to do that even when we were not in the Committee Room so on the topic mr. Rivera, i thank you listening to the arrows coming at you. Maybe some of them are partially deserved but i want to associate with my comments it was striking there is some part not to be 100 percent clear but when you talk about all the disaster loans approved since 1953 this is bigger than that. And even if you get down to business even in 20 20. 9 billion and then the numbers, not just Business Loans but those approved after june 26 over this is a ton of work you were saddled with. And with the 41 day turn time when Congress First appropriated money in the pre cares act with the Disaster Loan Program i was gearing up to go out with that. And then 30 days roughly. Why so long . And that the Disaster Loan Program is a disaster. And with those variety of topics that have been raised. Into deal with the private industry and things happen pretty quickly did you try to establish standards not just in this crisis. But before in terms of speed and efficiency . We do. As i mentioned when i first had this discussion with the administrator, we have a Disaster Preparedness Response Plan between zero and 50000, 50 through 250 and 25350500 plus. That was out of the window day number one. Cove it is not the metal we had one model we have ever followed. We had to start from scratch we do use the private Sector Company that does lending and that platform but we had to stop for two weeks to develop that platform. I cannot survive, thats not the right word but two loans per officer per day is unacceptable were doing over 25 or trying to use as many private sector best practices as we can did we not have that contractor surge we would had to have gone out. We thought we were prepared but we learned a lot. The level of preparedness is that we continue to work on. What you struck me is that you began to use doc you sign what struck me frankly is people have in signing with me for a decade as a private individual may be more. Why not earlier on things like that quick. Thats part of the government but it is a proven fact now everything can go on today with that perspective we just havent got around to spending the money for that but now that we have that it is a path forward. I do think some of the blame is bordered by congress we appropriated money to the program i was ready to go out and sell it as a path of relief people knew that would be a problem and those expectations to hear. I do commend you and i encourage you because if you chase a Service Standard in the private sector he will do a better job. Thank you you said before the denial rate was 40 percent. And that is to a half Million People. So what recourse if they feel they were wrongly denied . What are the processing times . When we decline somebody we give them reconsideration we give them that process that we use when we go under reconsideration we ask if they are Sole Proprietor or a copy of schedule c or business application. Even if you have a lower credit score there is still the abilit ability. That you just said that this pandemic for this disaster it is unprecedented. There is no comparison. So why is it you didnt consider the National Impact of this pandemic at any time considered modifying . The credit score we use it is the paper if the credit score is pretty low unfortunately we have to set up a standard and thats what we use we could have lowered it but that risk is a decision we did not make. What do you need today from us . Obviously we need better communication. Given what we have seen with the spike of the virus in different places, and also some states are shutting down or halting reopening those businesses will be impacted colorado arizona florida, do you expect for many millions of businesses to apply for the disaster . The declaration. Is nine months from the middle of march through december so we will continue to process any applications we have. As long as the money is there. My question is, do you think based on what is left how much money is left . We have 260 billion we spent 130 billion. Are you making or having an Economic Impact of the trends that we are seeing in other states . We are responding to the 8 million applications that we have. We have not done the analysis of another pandemic from that perspective. But we do a daily analysis on how much money is left and what is in the queue. So the administration has requested 50 billion i supported 100 billion. And sba said they needed half of that it showing that you that more than half of that. Im not sure how im supposed to respond to that. Im just warning you. My time has expired and i thank you madam chair i will use the whole five minutes. I think when asked about the period of time you were accepting agriculture only applications, i thank you said two weeks . And conferring with my staff we think it was longer may be made april through mid june approximately it was only applications for agriculture. Can you clear that up . I need to fact check myself i have to get back to you. Not trying to put you on the spot but i do think it was longer than the. We were get a inquiries not only for people in my district but other members of congress as Ranking Member of this committee i think it was an extensive period of time if you could check on that we appreciate it. On the same topic just for future reference, it would seem to be there was a more reasonable accommodation to those who are not agriculture during that period of time since they did not have access. I appreciate you may want to get more because they are more eligible thats understandable may be pulling something out of the had were 50 50 50 percent is set it aside for ag but there was still a considerable need, demand for non ag Small Businesses who needed these i loans. For future reference i would suggest consider Something Like that or consulting with congress. We didnt have much input some of those decisions were coming out and we were having considerable difficulty getting our phone calls responded to. Understandably you were very inundated trying to help people all over the country as your number one priority. But for future we can get better i think. Understood. I agree the communication piece. I appreciate. Weve all said this i will not beat a dead horse but the frustration on both sides of the aisle is more that we need to communicate with each other the administration, congress so we can communicate with our constituents who are the backbone of the American Economy just as they work for Small Business 70 percent of new jobs created are Small Business. You all just need to communicate better with us so we can communicate better. Thank you. I yield back. We recognize the gentleman from pennsylvania for five minutes. Thank you madam chairwoman in your leadership on this discussion. When the Program First launched many Business Owners in my district were excited. Many constituents have been waiting weeks or months to hear anything about their application they were denied the loans because of the Credit Scores. Now what the chairwoman raises and her discussion what she talked about in someone at testified before this committee and that has declined the most. This is quite concerning with 40 percent of the population is africanamerican. And sba did not indicate. So the question i would like to ask is the cares act has the appropriate methods to determine the ability to repay. Thats a question i would like to ask you. To respond to your question we start with the credit score is the streamline application if you want reconsideration you can provide a. That is something waived by a congress to use that as an indicator. So we can determine cash flow from that perspective. I will follow up with a couple of questions. With had Disaster Assistance load application. We have a team working on Natural Disasters and earlier this year with dedicated teams working on the covid effort is the processing time. According to our historical goals we are supposed to process 500,060 days and five. 5 million in 41 days we are exceeding internal goals but we have to get this out from the soonest possible in my perspective. Is there need for additional staff . And with the private sector with the company that allows us to have colleagues 24 7 and based on need it has been a phenomenal contract that enabled us of the 7000 between two and 3000 we have a traditional model between two and 3000 reservist. The combination of these factors is what we use in responding. We will continue to hire until this event is completed. If you had to rate the program yourself with the Africanamerican Community how would you rated at this point . We dont collect ethnicity or that information we havent since 1984 and from a race perspective we treat all applicants equal firm your perspective the disaster is a disaster and with the disaster survivor. What i am asking from that standpoint so in terms of how you think it has been effective and to raise questions about the effectiveness. Hello . Time is expired. We process, if im a Small Business from a Small Business owner that is the relevant point we would do that as soon as possible. I will pursue that a little further you said 41 days sounds good so give me some more insight so how you originate loans so listen carefully if you are absolved of that obligation and with that transcript you have to do some things to identify people i get that maybe there is a shortcut and get document signed and i heard that you get the credit application and the credit score to have a significant piece of legislation. The loan officer and then you get four hours to review the credit we give them 15 minutes we have really streamlined the process the challenge we have is the sheer volume and experience. What are they doing in the course of that review . Have a range of Credit Scores that are applicable it as a loan officer i need 15 minutes look at that credit score trying to see what else they have to do to examine that application. And with that governmental position of a team lead to approve that application we cant let the system do it. The other 70 percent to check the variables and they fact check those variables. Like what . And then those things connecting from that perspective. So the process gets 15 minutes to look at application that 15 minutes is 15 minutes. Im just saying 41 days from my perspective based on the traditional goal of 30, 45, 60 we beat the 60 day goal. My intent isnt to say we are satisfied that based on the plan of the historical disaster plan and there is a reasonableness from the time perspective if we could do it in 15 or 30 days we would have. But we build these and five days right now with the current q we have learned a lot. I hear you. That is the nature of the road with the expectations people being dissatisfied the customer is always right. Rule number two and then refer to rule number one but its hard even when i interact it seems like that could be done if you are excused from the requirements by the legislation may be of congress looked at it again and then excuse you from looking at the credit score. Those are the things that people find difficult or frustrating suggest to balance that again and congresswoman craigs comment the Congressional Liaison with the situation with the ppe line makes a different preference not because of what sba did but that there was a snag into very quickly to say give us the eiletter nletter number and then we could pinpoint the problem. Sure there are differing stories but the object is to respond in a substantive way. . To lend. I guess i have to go back to this cap of 150,000. I know so many businesses who need it more and applied for more. What are they supposed to do . In some situations, what theyve learned is when you apply we dont ask them to demand. We base it on six months of working capital. We go back to what you generated over the last 12 months. Thats the loan amount that was determined from that perspective but i think if we had done 500, i dont know the decision was let me take you back the decision was 50 billion leveraged seven times. We couldnt have done 500,000dollar loan at the time so theres a lot of analysis and we did all the variables into the decision waand thedecision y to move forward. I dont do math that while that is roughly one third of the program. You would have consumed all the money certainly more than 150,000. They have said we needed more money to the tal hotel to that of the vote of 150,000. As yo youre mentioning 19 of e 150 so there would have been more eligibility to. The average is 61,000. They are getting enough to get what they need close to paying the bills that they are going to have. Remembered at thremember thee payroll so i understand that was kind of the dovetail approach. I would like to explore this separately. You asked earlier how would you rate the program and like i said i know how hard everyone is working and i dont mean to be critical of all of the employees working 24 7. I know that and appreciate that. When i did my consulting i worked with Small Businesses and i would say lets start with a plain piece of paper. Forget what you have. If you could start over, if you could design the system because we know the pandemic what would you do to make sure we do a better job supporting americas Small Businesses . We had the right approach. That is one thing that we did good. Probably should have had visibility in the application portal. Lets look at what we gave to ensure a want them to succeed not just for the threshold to blow it out of the water, to be so good people come back and say we think author the government and look to a future to ensure that our kids and grandkids can be processed. I think that is pretty good Service Since we had used 2 million come in. I do want to say thank you for having this hearing. Whatever we can do to help them succeed. The gentleman yields back and now i recognize the gentleman from pennsylvania i want to go back to something you said given the opportunity to the reconsideration. Can you describe the process to how long the reconsideration take is . The reconsideration process is when they submit information for us to determine the cash flow. I think that its 65, 70 of the loans are based on a lower credit score so we ask for a copy of the text transcript or we get a copy from the Internal Revenue service. There is eligibility cases where somebody opened a Business Post that date. We have about 100,000 application is and they continue to work these as fast as possible. Can you qualify that . I dont have the statistic in front of me but i think it is two to three weeks on average. So if an applicant is to prove that consideration, would there be a remedy . At some point it may but right now it is not an issue. They still process the application loans such as the civil unrest. Processing fees is if still within the normal timeframe . I think the goal right now is ten days on average. We declared a couple of counties in illinois and Southern California for the civil unrest. Weve booked a billion dollars this fiscal year. We have proved billion dollars acrosstheboard. We had an earthquake in puerto rico and they have floods and tornadoes. We generally do 1. 1 billion a year so we are right on track as the average. Said california, illinois. We have said there pending requests. I can get back with you for the record. I know its not easy but i appreciate having this hearing because transparency and openness is extremely important because we have people out there that hear about it the execution you can understand is something very important in my current . Yes sir. We definitely understand that. I thank you for allowing me this comment. Think you july 1 and here we are. You need to improve communications with borrowers, Customer Service across the board has been an issue that time and again has been graced with her in the hearings were phone calls coming in from constituent. You also need to improve the communications with the authorizing community. Both the senate and the house. You have to improve your communication. And as congress continued to help businesses in order to survive i will implore you that you sent to us any request that you considered as essential in order to perform your responsibility as to the businesses that they are supposed to serve. Without objection, so ordered. If theres no further business before the committee, we are adjourned. [inaudible conversations] for the president s signature. Senator Susan Collins and Patrick Leahy of vermont spoke on the senate floor about the bill. Madam president , last night the Senate Approved legislation to extend the Paycheck Protection Programs through augustti 8. They have been especially hard hit by covid19 mitigation measures