Name: Florida businesses sue Small Business Administration over delayed loans
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Florida businesses sue Small Business Administration over delayed loans

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AdvertisementBy Orlando SentinelApr 28, 2020 at 7:00 amIn a federal lawsuit filed in Orlando against the U.S. Small Business Administration, a group of Florida businesses alleges that the SBA, in charge of administering the federal government’s Economic Injury Disaster Loan, is not running the program as lawmakers intended.The more than 50 businesses represented in the suit, all clients of the Melbourne Widerman Malek law firm and mostly based in Florida, are among the countless who have applied to the program that’s usually reserved to help small businesses weather hurricanes, floods and earthquakes but was looked to as a remaining lifeline for small-business owners forced to scale back or close during the coronavirus outbreak.AdvertisementThe program was initially advertised as being able to provide loans up to $2 million and more coveted, $10,000 advances that didn’t need to be paid back and would be quickly disbursed in just three days. Several small businesses saw the EIDL program as a more accessible alternative to the federal Paycheck Protection Program, but facing unprecedented demand, the SBA has recently attempted to scale back the program, limiting initial loan amounts to only $15,000 and advances to just $1,000 per employee.Additionally, few applicants have received advances in the three days promised “in complete defiance of the law and the specific directive of Congress, and without discretionary authority to do so,” the lawsuit states. None of the businesses included on the federal lawsuit, nor Widerman Malek which also applied for relief, have received the $10,000 advances.AdvertisementIn emails to some applicants, the SBA said changes were made to the EIDL program “to ensure that the greatest number of applicants can receive assistance during this challenging time.”But Jeff Ippoliti, an attorney at Widerman Malek, said, “SBA does not have the legal authority to make that judgment." The lawsuit demands that all of the plaintiffs receive the $10,000 advances promised under the program.The SBA did not respond to a request for comment.As of April 24, 38,984 economic injury disaster loans had been approved, totaling more than $7.9 billion, according to the most recent data available from the SBA. In Florida, 2,936 had been approved by that time, totaling more than $540 million. Additionally, 1,192,519 loan advances had been approved nationwide, totaling $4.8 billion, including 110,428 advances that were approved for Florida businesses, totaling $406 million.WeeklyA weekly update on health news in Florida. &gt; Some lawmakers have also appeared frustrated over the backlog of applicants, which they say has resulted in “millions of small business owners [who] are waiting for a response from the SBA regarding EIDL loans.”In a letter to SBA Administrator Jovita Carranza, more than 80 Congressional lawmakers described how “many small business owners have been confused and frustrated regarding the status of their loan and grant application," have reported “long wait times and unsatisfactory answers regarding loan status when inquiries are placed” and “struggled to even determine if their loan application has been received.”Lawmakers acknowledged that the program was “never designed to process a disaster of this magnitude," pointing to technical problems with SBA’s application system, and even commended the Small Business Administration for its work. But small businesses in danger of shuttering permanently cannot wait much longer to receive EIDL funds, they said.Additionally, lawmakers argued that “many small businesses cannot weather the COVID-19 crisis if initial distributions are limited to as little as $15,000 for loans and grants are rationed by number of employees.”AdvertisementIn a separate letter to Carranza and U.S. Treasury Secretary Steven Mnuchin, Democratic members of the New York City’s congressional delegation also expressed concern that the Economic Injury Disaster Loan and Paycheck Protection Program “are not being implemented as Congress intended" and “SBA has failed to ... award grants in a manner consistent with Congressional intent.”“The SBA has metered the amount of the EIDL grant to $1,000 per employee, even though Congress specifically stated that the applicant, not the agency, has the sole authority to determine how much grant money they receive up to $10,000," the letter states. “Moreover, the law requires SBA to issue advances within three days of receipt of applications, yet small business owners say they are still waiting weeks after applying.”Email the reporter at and follow her on Twitter . Advertisement

AdvertisementBy Orlando SentinelApr 28, 2020 at 7:00 amIn a federal lawsuit filed in Orlando against the U.S. Small Business Administration, a group of Florida businesses alleges that the SBA, in charge of administering the federal government’s Economic Injury Disaster Loan, is not running the program as lawmakers intended.The more than 50 businesses represented in the suit, all clients of the Melbourne Widerman Malek law firm and mostly based in Florida, are among the countless who have applied to the program that’s usually reserved to help small businesses weather hurricanes, floods and...

Florida businesses sue Small Business Administration over delayed loans

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