SBA Chief Says Ensuring Equity Critical to Success of COVID Relief Program

WASHINGTON — While much good came from the COVID relief funds doled out by the Small Business Administration as the pandemic ran its course time has shown that certain businesses — particularly those owned by women and minorities — went underserved in the earlier aid rounds.

More recently, the distribution of pandemic relief funds intended for restaurants owned by women, veterans and the disadvantaged was halted following the filing of a discrimination lawsuits.

Recently, SBA Administrator Isabel Casillas Guzman spoke with Axios to discuss steps being taken to rectify these situations while continuing to try to help small businesses still reeling from the pandemic.

“It is the Small Business Administration’s focus to commit to support and assist these underserved small businesses broadly,” Guzman said. “We are still in a disaster.”

Among those businesses that were identified by Congress to be hardest hit were restaurants, so the SBA’s Restaurant Revitalization Fund was a critical program for industry relief, but the agency controversially went even further to push forward applications from underserved groups for close to three weeks.

“Congress also wanted to ensure equitable access, so a 21-day priority period was established for women, veterans, and socially and economically disadvantaged businesses, with the hope that we could expand our outreach into those communities,” Guzman explained. 

A lawsuit filed in Texas is now arguing that the Biden administration’s attempt to prioritize aid based on gender and race is unconstitutional, though the White House has countered that priority relief efforts for the disadvantaged could right past wrongs. 

Over 100,000 awards have been distributed with over $27.4 billion in funding, yet monies dedicated to “priority” applicants are currently under injunction. 

Guzman was unable to speak to specifics of the litigation, but did offer that “we need to transform the way we design and implement… programs so that more businesses can access them, because there are historic barriers that are unacceptable if we are going to recover and rebuild.”

In addition to the importance of tracking data on whether loan disbursals are equitable, Guzman said that recognizing how to appropriately market assistance to smaller employers is also essential.

Calling the Biden administration’s focus on equity “critical,” Guzman said the SBA is focused on “building bridges and making connections” and “making sure that we are making those connections so that businesses are aware of the offerings as soon as possible and that they feel comfortable with the information, and content, and process.”

“We have to understand where those entrepreneurs are, meet them where they are, and serve them with products and offerings that are tailored to them in a way that is accessible.”

While SBA relies heavily on financial service partners to distribute its loans and investment programs, these service providers also help the agency to connect with stakeholders and offer  information on the ground to small businesses. SBA’s recently established Community Navigator Pilot Program is intended to strengthen outreach to underserved businesses by partnering with organizations with deep roots in their communities. 

“We are seeking organizations that can be trusted partners in communities and connect small businesses to resources,” Guzman said.

PPA and the Restaurant Revitalization Program are completed, but SBA is still offering some programs, including its Economic Injury Disaster Loan program, Targeted EIDL Advance and Supplemental Targeted Advance programs.

“We need to encourage our start-ups,” Guzman said, “and we know that ideas come from everywhere.”