Guzman intends to prioritize underserved firms in PPP loans

      Isabella Casillas Guzman, who is President Joe Biden’s nominee to head the Small Business Administration, intends to focus attention on underserved small firms for loans and assistance during her term.

      The underserved firms are those that traditionally have lacked support from banks and whose communities have been hit hardest by the pandemic.

      Guzman, whose father was a small business owner as a veterinarian, testified to the Senate Small Business and Entrepreneurship Committee on Feb 3 on her goals for the agency.

      “President Biden has committed to advancing racial justice and equity for all Americans,” Guzman said in her testimony. “If confirmed, I am committed to helping the SBA advance opportunity for all, including our underserved entrepreneurs who have faced historic barriers to start and grow their businesses.”

      Guzman also pledged to be “transparent, responsive, and accessible to this committee about SBA’s operations and needs.” Several committee members revealed that communications had been strained with the previous administration, particularly in being unable to access data on the PPP program.

      Guzman, who grew up assisting her father in operating his veterinary hospital, addressed a number of concerns raised by the panelists, especially regarding the multi-billion-dollar Paycheck Protection Program (PPP) pandemic relief loans for businesses.

      Sen. Ben Cardin, D-MD, the incoming chairman of the committee, said they drafted language for PPP lenders in last year’s CARES Act asking them to prioritize loans to underserved small businesses that had been most hurt by the pandemic. The Page 30 Coalition advocacy group, consisting of black, Hispanic and Native activists, lobbied for greater targeting of pandemic relief to disadvantaged and rural communities.

      “Unfortunately, the Trump Administration did not issue that guidance,” Cardin said. As a result, the SBA’s Inspector General in May 2020 issued a report saying that SBA’s interim final rule for implementing the PPP loans “did not fully align with the Act’s provisions” with regarding to the prioritization of “underserved and rural markets.”

      Part of the problem is that demographic data on who is benefiting from the PPP loans has been sparse. “We made requests for demographic data,” Cardin said, “and we were basically unable to get that information.”

      For the most recent pandemic relief bill of December 2020, Cardin said the latest report shows that fewer than 22% of the borrowers completed the demographic questionnaire.

      Guzman said data is critical to overseeing the PPP and she would emphasize “communication and collaboration” with Congress, and also make sure “that we are fully leveraging technology.”

      Guzman also was asked about PPP loans for formerly incarcerated people, loans for manufacturers and whether 8(a) firms could extend their time in the program due to the pandemic. She was generally supportive.

More information:
Hearing website: https://bit.ly/2YQgHD4

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