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SBA chief Guzman talks RRF future, minority support

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U.S. SBA Administrator Isabel Casillas Guzman talked with Delaware Business Times about the future of the RRF and minority support. DBT PHOTO BY JACOB OWENS

WILMINGTON – As the Biden administration continues to promote its response to the COVID-19 pandemic amid a “Build Back Better” tour – 14 Cabinet secretaries are hosting events this week, according to the White House – U.S. Small Business Administrator Isabel Casillas Guzman stopped in President Biden’s hometown to talk with small business owners Monday.

Her office, typically the smallest of all Cabinet members, has taken an outsized role in the response effort by overseeing programs like the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), Restaurant Revitalization Fund (RRF), and more.

On Monday afternoon, the Delaware Business Times sat down for a one-on-one interview with Guzman about what’s next for her office. Her comments are lightly edited for clarity and concision.

Businesses right now have a variety of pandemic-spurred challenges, from diminished revenues to labor shortages to differing governmental health guidelines. When you think about small businesses, is there one particular challenge that stands out more than any other during this pandemic?

For small businesses, the connection to resources I think is the biggest challenge. There are great resources out there available, and the SBA provides quite a bit of it. We want to make sure that all businesses are aware that there are counseling opportunities out there and there are capital connections out there for them.

One of the major programs during your tenure was the Restaurant Revitalization Fund, which, as we’ve seen today, has made an impact in some places but obviously there’s a number of restaurants out there that are still awaiting some aid. So far, the Biden administration hasn’t taken a position on the Replenishment Fund Act and I’m curious whether you think the administration is going to do so.

At this point, no. We’re just administering the program in terms of Congress’s direction – $28.6 billion got out to over 100,000 restaurants across the country. So, we’re pleased to see that distributed as quickly, efficiently, and equitably as possible, and leveraging technology as well. But, at this point, it would take a congressional act.

In your conversations today with Sen. Coons and Congresswoman Blunt Rochester, did you talk about the potential future of adding more money to the RRF?

Yes, there’s continued conversations and it’s my understanding that there are multiple vehicles that they’re exploring to see whether or not they could provide additional funding for this program. SBA stands ready to implement if we receive additional funding.

For the ones that were approved, if for some reason down the line that they were deemed ineligible, is there a mechanism to claw back those funds and get them to other applicants? Is there an auditing process to the RRF that would ensure that all the funds are spent after some of the other programs we’ve seen like PPP where all the money didn’t go out?

The SBA has awarded those funds, but of course we continue to collaborate, in terms of fraud prevention, to make sure that if there’s any ineligibility issues that we’re able to track those dollars and put them into the program. But at this point that program is closed, and there’s no intent for reopening it.

One of the other programs that is still open is the EIDL program, and its targeted and supplemental advance funds. There are large swatches of Wilmington, and Delaware, that fall into the program’s low-income zones, so how might businesses take advantage of those programs?

With the COVID EIDL loan product itself, we’ve revamped the entire process and assigned a new team to make sure that we can streamline those funds out the door because those are important. They’re long-term, low-cost, and fixed-interest loans, so we want to make sure that we’re positioned to offer those relief funds.

When I first started in March, we changed the limit on COVID EIDL from $150,000 to $500,000 with the announced intent to increase it to $2 million. It’s a good available recovery tool for small businesses, and if you’re in a low-income area, you have a certain revenue impact and you are at a certain size, you are eligible for the advance and supplemental grants, worth $10,000 and $5,000, respectively. We continue to amplify and do outreach so that businesses who are eligible can take advantage of those additional funds.

For anybody that might be eligible and hasn’t applied, what’s the best way to apply for the EIDL and its grant advances?

All of those programs through COVID EIDL are direct programs, so they’ve got to contact their local SBA district office for assistance or reach out to us via sba.gov.

You spent some time in the Obama administration as SBA deputy chief of staff. What lessons did you learn that might suit you well in your top role in the Biden administration?

Well, clearly SBA is a changed agency. It’s gone from $40 billion to over $1 trillion, but the same essential core offerings remain. We’re here to try to make sure that we reach all of our small businesses; they are job-creators and they need assistance. There are opportunity gaps and capital gaps in the marketplace, so we want to quickly evaluate our programs. Everything’s on the table to make sure that we have good offerings that meet businesses where they are today, especially during COVID.

You’ve talked in recent weeks about the potential that the infrastructure plan has for America’s small businesses. With some of the details coming out this morning on the bipartisan plan, how do you see the impact and how small businesses fit into that equation?

Core infrastructure really impacts businesses. Obviously if they can ship their products more efficiently with roads and bridges established, then that’s beneficial to them. If all of them have broadband, they could take advantage of the future with e-commerce. Those things are very critical. As we look toward the “Build Back Better” agenda, our global competitiveness broadly, investments in supply chain, etc., small businesses are a big part of all of those industries and will benefit.

As you look over the last half of 2021, do you have any major goals for your office?

I recently launched the Council on Underserved Communities to explore what challenges [lower median income] areas, rural areas, women, people of color, veterans, are facing in their communities. For our economy to recover fully, we need all of our great ideas from everywhere and anywhere as the president says.

And I’m looking forward to continuing to engage on listening tours like this in Delaware and around the country to hear from businesses and see what they need going into the future. We’re already starting to get an idea of that and position SBA products to support them.

After the court cases in Texas and Tennessee stifled a little bit of the drive to reach minority-, women- and veteran-owned businesses with the RRF, have you kind of looked at that as a lesson in terms of how to coordinate some future programs to address some of those underserved populations?

The SBA remains committed to ensuring equity across our programs and opening up access and building bridges so that all businesses are able to access relief from resources. We were able to get $18 billion of the $28.6 billion out to the underserved communities and subgroups identified by Congress, so we’re pleased with the results and happy that we were able to help over 100,000 restaurants total within that program.

As we look to future programs though we’ll continue to focus on design and outreach that meets businesses where they are. That means understanding not only what their business makeup is and the challenges they’re facing, but also the networks that they’re engaged in.

The council as well as the Community Navigators pilot program funded by American Rescue Plan really broaden SBA’s network. We’re trying to leverage this moment in SBA history and really amplify our message out to small businesses. We hope to build those stronger relationships and connections that will fortify those businesses in the future.

As small business owners deal with all the things we’ve talked about and now maybe prepared to deal with the prospect of the delta variant, do you have a message for them?

The SBA remains steadfast in its commitment to work around the clock to create programs and offerings that will help their business or businesses, and the Biden-Harris administration is really committed to combating COVID. We know, ultimately, that’s what’s going to help them fully recover and regain their revenues and opportunities. We are resolved in that commitment and are hopeful for the future.

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