The Economic Injury Disaster Loan Program: Status Update From the Administration (July 1, 2020)

Summary

This is a hearing before the Committee on Small Business of the United States House of Representatives, titled The Economic Injury Disaster Loan Program: Status Update From the Administration, on July 1, 2020. The contents list opening statements by Nydia Velázquez and Steve Chabot and a witness, James Rivera, Associate Administrator, Office of Disaster Assistance, Small Business Administration. Velázquez describes SBA's reduction of the maximum loan size from $2 million to $150,000, and Chabot says the program has delivered just over 2 million loans, for $127 billion. The contents also list questions from Dwight Evans to Rivera, with answers.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Issuer: Congressional materials
Document type: Congressional Hearing
Case: Chrg 116Hhrg41295

Cite this document

“The Economic Injury Disaster Loan Program: Status Update From the Administration (July 1, 2020).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-116hhrg41295/, SHA-256 09df0cf96c5a324376f13e014133cbe8472dff542035a0bd36f2ec2a2ffabc68.

Full text

THE ECONOMIC INJURY DISASTER LOAN
PROGRAM: STATUS UPDATE FROM THE
ADMINISTRATION

HEARING
BEFORE THE

COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION

HEARING HELD
JULY 1, 2020

Small Business Committee Document Number 116–084
Available via the GPO Website: www.govinfo.gov

U.S. GOVERNMENT PUBLISHING OFFICE
41–295 WASHINGTON : 2021

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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
DAN BISHOP, North Carolina

MELISSA JUNG, Majority Staff Director
JUSTIN PELLETIER, Majority Deputy Staff Director and Chief Counsel
KEVIN FITZPATRICK, Staff Director

(II)

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CONTENTS
OPENING STATEMENTS
Hon. Nydia Velázquez ............................................................................................. 1
Hon. Steve Chabot ................................................................................................... 4

WITNESS
Mr. James Rivera, Associate Administrator, Office of Disaster Assistance,
Small Business Administration, Washington, DC ............................................. 5

APPENDIX
Prepared Statement:
Mr. James Rivera, Associate Administrator, Office of Disaster Assistance,
Small Business Administration, Washington, DC ..................................... 38
Questions and Answers for the Record:
Questions from Hon. Dwight Evans to Mr. James Rivera and Answers
from Mr. James Rivera ................................................................................. 42
Additional Material for the Record:
None.

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THE ECONOMIC INJURY DISASTER LOAN
PROGRAM: STATUS UPDATE FROM THE
ADMINISTRATION

WEDNESDAY, JULY 1, 2020

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The Committee met, pursuant to call, at 10:05 a.m., in Room
2118, Rayburn House Office Building, Hon. Nydia M. Velázquez
[chairwoman of the Committee] presiding.
Present: Representatives Velázquez, Finkenauer, Kim, Davids,
Chu, Evans, Schneider, Delgado, Houlahan, Craig, Chabot,
Radewagen, Balderson, Hern, Hagedorn, Stauber, Burchett, Spano,
Joyce, and Bishop.
Chairwoman VELÁZQUEZ. Good morning. I call this hearing to
order.
Without objection, the Chair is authorized to declare a recess at
any time.
I want to thank everyone, especially our witness, for joining us
today for our Committee’s hybrid hearing.
I want to make sure to note some important requirements. Let
me begin by saying that standing House and Committee rules and
practice will continue to apply during hybrid proceedings. All mem-
bers are reminded that they are expected to adhere to these stand-
ing rules, including decorum.
With that said, the technology we are utilizing today requires us
to make some small modifications to ensure that the members can
fully participate in these proceedings. During the covered period, as
designated by the Speaker, the Committee will operate in accord-
ance with House Resolution 965 and the subsequent guidance from
the Rules Committee in a manner that respects the rights of all
members to participate.
House regulations require members to be visible through a video
connection throughout the proceedings, so please keep your cam-
eras on. Also, if you have to participate in another proceeding,
please exit this one and log back in later.
In the event a member encounters technical issues that prevent
them from being recognized for their questioning, I will move to the
next available member of the same party and will recognize that
member at the next appropriate time slot, provided they have re-
turned to the proceeding.
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Should a member’s time be interrupted by technical issues, I will
recognize that member at the next appropriate spot for the remain-
der of their time once their issues have been resolved.
In the event a witness loses connectivity during testimony or
questioning, I will preserve their time as staff addresses the tech-
nical issues. I may need to recess the proceedings to provide time
for the witness to reconnect.
And, finally, remember to remain muted until you are recognized
to minimize background noise. In accordance with the rules estab-
lished under House Resolution 965, staff have been advised to
mute participants only in the event there is inadvertent back-
ground noise. Should a member wish to be recognized, they must
unmute themselves and seek recognition at the appropriate time.
For those members here in the room today, we will also be fol-
lowing the health and safety guidelines issued by the Attending
Physician. That includes social distancing and especially the use of
masks. I urge members and staff to wear masks at all times while
in the hearing room, and I thank you in advance for your commit-
ment to a safe environment for all here today.
Last night, on the eve of the date the Paycheck Protection Pro-
gram expires, the Senate passed a bill to extend the program to
August 8.
From the inception of the program, I have clearly stated that,
until we know where the money is going and how our very small
businesses, which includes independent contractors and sole propri-
etors and minority- and woman-owned firms, are faring, we cannot
blindly extend the program. With that said, Congress still does not
have the data it was promised, nor does the public have any infor-
mation.
In May, the Congress passed the HEROES Act, which extended
the program through the end of the year and set aside funds for
small businesses with fewer than 10 employees and leveraging our
mission-based lenders, like CDFIs, MDIs, and microlenders.
Moreover, this important bill included provisions to require the
administration to provide regular disclosure to Congress and the
public. Yesterday, Secretary Mnuchin stated he was working with
the Senate on the next steps for PPP and spoke of secondary loans.
As I have said all along, I invite the Senate and the administra-
tion to sit down with us to discuss extending PPP loan authority
and the many improvements put forth by members of this com-
mittee.
We are meeting today to conduct an important hearing on SBA
implementation of the Economic Injury Disaster Loan Program or,
as some call it, the EIDL Program, which was activated on March
12, making it the first economic relief program to assist small busi-
nesses adversely impacted by the coronavirus pandemic.
I would like to thank Mr. James Rivera, the Associate Adminis-
trator for SBA’s Office of Disaster Assistance, for being here today
to discuss many of the issues surrounding the implementation of
the EIDL Program.
Mr. Rivera, I value your commitment and the hard work of your
staff, and I fully understand the extraordinary efforts put forth to
respond to this unprecedented crisis. However, we are holding this

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hearing today because of some very concerning issues that have
hindered relief for thousands of small businesses.
As you know, we held a hearing last month in which we heard
directly from the EIDL applicants about their experiences with the
program. One small-business owner discussed the negative impact
of SBA unilateral reduction of the maximum loan size from $2 mil-
lion to $150,000, a cut of more than 90 percent.
He, like thousands of small-business owners across the country,
was drawn to the EIDL Program largely due to the ability to use
an EIDL loan for more than just payroll. Imagine being in the posi-
tion of thinking this program, at a max of $2 million, is just what
your business needs, only to learn at loan approval that SBA had
drastically reduced the loan amount.
This is precisely the kind of information that needs to be con-
veyed to borrowers ahead of time. It makes it a fundamentally dif-
ferent loan product. And for those who needed an amount greater
than $150,000, EIDL was rendered irrelevant.
Throughout the process, SBA showed a lack of understanding of
the challenges facing small businesses related to COVID-19, espe-
cially by offering a one-size-fits-all $150,000 loan without offering
them an opportunity to apply for a second loan or seek additional
funding. Small businesses looking to the SBA for help were essen-
tially told, ‘‘Take it or leave it,’’ regardless of need or size, and then
told to have a nice day.
We also heard from a community pharmacist in south Philadel-
phia who applied for the EIDL loan but was denied due to unsatis-
factory credit history. This is a lifelong entrepreneur who has
struggled with resisting margins and is now saddled with addi-
tional burdens due to COVID-19.
Borrowers like the community pharmacist who have been denied
for allegedly unsatisfactory credit history have reported that the
credit threshold for approving a loan is not clear and borrowers do
not know what the limit is, leaving them feeling like the decision
was arbitrary. I am sure it would be helpful to all if SBA simply
communicates the credit minimums to small businesses up front.
I have also heard from small businesses who were denied be-
cause of unverifiable information, meaning there were items that
were reviewed that caused SBA to question the validity of the
items. But the denial letter never detailed the information that was
missing, leaving applicants with little insight as to why they were
denied.
Though these decisions can be appealed, that only adds to the
delays and expenses of a struggling business owner. These busi-
nesses need relief, and they need it now.
Even more troubling is the fact that the SBA has not commu-
nicated well with applicants, nor has it provided them with reliable
ways to check the status of their applications. Borrowers are sim-
ply told that the loan is processing. The only other updates they
receive are whether the loan has been approved or denied.
Applicants need to know where they stand in the queue so they
know how much longer they must wait before receiving financing.
And given the current economic climate, if they are going to be de-
nied, they deserve to know quickly so that they can explore options
for capital elsewhere.

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Finally, there was a long period during which the EIDL applica-
tion portal was limited to only agricultural small businesses, which
is completely at odds with the intent of the Small Business Act and
the mission of the SBA, which is to aid, counsel, assist, and protect
the interests of all small businesses.
It is particularly troubling to have heard allegations that these
loans were being processed before other applications that were al-
ready in the queue. And we hope to get a clear answer on that
today.
At the Committee continues its oversight duties, I am looking
forward to hearing from Mr. Rivera about how many applications
are currently pending in the queue, how much more funding is nec-
essary to meet the loan demand, and what steps SBA is planning
to take to ensure small businesses across the country receive the
economic relief they need to survive.
Already, a number of large companies have declared bankruptcy
post-COVID-19, and experts say it is not long before this wave of
bankruptcies hits small businesses. We need to be doing more to
help avert this outcome.
With that, I look forward to hearing from Mr. Rivera on the
EIDL’s performance in response to COVID-19 and what ODA needs
from Congress to fully implement the EIDL Program consistent
with our intent.
I now yield to the Ranking Member, Mr. Chabot, for the opening
statement.
Thank you.
Mr. CHABOT. Thank you, Madam Chairman. And thank you for
holding this meeting on the Small Business Administration’s Eco-
nomic Injury Disaster Loan Program, popularly known as the EIDL
Program.
At the beginning of the year, the Nation’s economy and the coun-
try’s small businesses were reaching new heights. We were experi-
encing historic levels of unemployment, and momentum was build-
ing. For example, unemployment among African Americans, Asian
Americans, Hispanic Americans was at all-time lows, meaning that
more and more people were working. That was a good thing.
Unfortunately, COVID-19 made its way to our shores. As a re-
sult, a huge number of America’s small businesses, coast to coast,
were forced to close their doors and turn off their lights. With de-
mand for goods and services limited by this emergency, small busi-
nesses shifted to survival mode.
It was clear from the beginning that the Nation’s smallest firms
would need immediate access to capital to weather the storm. The
SBA was handed a task that was unequaled in our history.
Congress, in a bipartisan fashion, and the Federal agency that
represents, assists, and fights for America’s smallest firms re-
sponded by setting up the Paycheck Protection Program, which
works in partnership with private lenders to deliver funds to small
businesses. This program has delivered 4.8 million loans, in the
amount of nearly half-a-—actually, over half-a-trillion dollars now.
The SBA also continued to administer the Economic Injury Dis-
aster Loan Program, EIDL, which had its roots as a post-event re-
covery program for businesses and communities that were hit by
a natural disaster.

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Both of these programs, from the beginning of this crisis, experi-
enced overwhelming, unprecedented demand. EIDL shifted imme-
diately from being a regional program—a natural disaster typically
strikes a particular locale—to a full-fledged national relief pro-
gram.
Thus far, the program has delivered just over 2 million loans, for
$127 billion. In my home State of Ohio, for example, the program
has delivered 45,000 loans, for $2.6 billion, to date.
I would like to thank the SBA for being a vital resource to the
Nation’s small businesses, entrepreneurs, and startups. However,
we are a number of months into this crisis now, and the SBA’s
EIDL Program has a lot of room for improvement.
While EIDL loans are being processed and the Advance grants
are being disbursed, too many small businesses are left with ques-
tions—questions on communication, questions on the status of their
loan, and questions surrounding the maximum loan amount under
the program.
When small-business owners are left with limited information,
common, everyday business decisions become difficult. We must
strive to provide small businesses with as much information as pos-
sible, especially during these uncertain times.
I look forward to getting to the bottom of many of these ques-
tions and determining how we can work together to provide solu-
tions for our Nation’s smallest firms.
I want to thank the SBA’s Associate Administrator for the Office
of Disaster Assistance, Mr. James Rivera, for joining us today. I
look forward to his testimony and also, obviously, answering ques-
tions from members on both sides of the aisle.
As was the case prior to the COVID-19 outbreak, I know that
small businesses will once again be our Nation’s guiding light.
And, with that, Madam Chairwoman, I yield back.
Chairwoman VELÁZQUEZ. Thank you, Mr. Chabot.
I would like to thank a moment to explain how this hearing will
proceed. Each witness will have 5 minutes to provide a statement,
and each Committee member will have 5 minutes for questions.
Please ensure that your mike is on when you begin speaking and
that you return to mute when finished.
With that, I would like to introduce Mr. James Rivera, the Asso-
ciate Administrator for SBA’s Office of Disaster Assistance. In this
capacity, Mr. Rivera directs the SBA Disaster Loan Program, in-
cluding EIDL.
He began his SBA career in Texas in 1989, serving as a disaster
loan specialist. Over his 30-year SBA career, he has also served as
the Associate Administrator for the Office of Financial Assistance.
And prior to his public service, Mr. Rivera was a commercial loan
officer in the private sector.
We welcome you back to the Committee, and you are recognized
for 5 minutes.
STATEMENT OF JAMES RIVERA, ASSOCIATE ADMINISTRATOR,
OFFICE OF DISASTER ASSISTANCE, SMALL BUSINESS AD-
MINISTRATION, WASHINGTON, D.C.
Mr. RIVERA. Good morning, Chairwoman Velázquez, Ranking
Member Chabot, and members of the Committee. Thank you for

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the opportunity to update you on the agency’s Economic Injury Dis-
aster Loan Program and our response to the coronavirus pandemic.
In March, SBA worked with all States and territories to facilitate
approval of 56 disaster declarations for small businesses affected
by the pandemic. At that time, Administrator Carranza made an
important administrative change to ease the business impact cer-
tification. This enabled the SBA to provide disaster loans for small
businesses in all 50 States and 6 U.S. territories, and it established
a nationwide disaster assistance program.
As a result, the loan numbers and dollars we are experiencing
are unprecedented so far. This agency has provided economic relief
to over 6.8 million small businesses, for over $147 billion. This
more than doubles the amount of disaster aid provided in the en-
tire 67-year history of the agency.
To help achieve that, SBA created and implemented an entirely
new online portal application and distribution system for EIDL
loans and grants. This system has now handled over 8 million ap-
plications and has allowed us to distribute dollars to those small
businesses in record time. Currently, we are processing grants in
less than 2 days.
The pandemic and nationwide program has also required the
agency to scale up our disaster staff, now totaling over 7,000 per-
sonnel.
Meanwhile, our program office continues to service 175 other
major and agency disaster declarations, which total a billion dollars
in natural disasters this year, including the two recent requests
from Governors for small businesses assisted in areas of civil un-
rest.
These successes, unparalleled and historic for the agency, have
not been without their challenges, however. Let me mention a few.
First, between mid-March and the end of April, the agency had
to stop processing applications three times. This was due to the
program changes made through CARES Act legislation, the lack of
funds, and the need to stand up an entirely new system to admin-
ister the grants. During this time, the agency received close to 4
million applications in a 2-week period. This did set us back, and
we have now been working hard to catch up since.
In moving quickly to build the new system, we unfortunately
were not able to provide the same internal visibility as exists with
our disaster loan application portal. This, combined with the appli-
cation volume mentioned above, resulted in uncertainty for many.
Following the exhaustion of funds and in receiving additional
funding, the agency looked at how best to maximize these dollars
for pending applications, newly eligible agricultural enterprise
businesses, and future applicants. In reopening the portal 2 weeks
ago, we also needed to keep in mind that the disaster application
period, as defined in the 56 declarations, runs through mid-Decem-
ber.
With regards to the EIDL grants or advances, the agency also
looked at how best to maximize those funds. We consulted bill au-
thors, and, through a per-employee allocation, we now have been
able to reach 2.2 million more businesses with financial aid.
I mentioned the significant growth in our staffing, but that
comes with the need of education and training. We continue to ad-

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just every week to the demands in our call center and in our loan
processing centers.
In highlighting our successes and reflecting on our challenges, it
is also important to evaluate where we are today. We have been
continuously processing loans for 2 months. All applications have
now been initially decisioned. All advances have been distributed.
Our processing times, due to volume and stoppages, averaged
around 41 days. Since we reopened the portal, our processing times
for new applications are now 5 days. We are much stronger and at
a stable operational staff level today, and small businesses are get-
ting the needed dollars disbursed to them in record times.
At SBA, our mission is one of service. We have a proud history
of helping small-business owners in their time of need. Every dis-
aster event is unique, and there are always lessons learned. While
facing a disaster situation unlike any in our agency’s history, we
have had to do this while operating in a telework and virtual envi-
ronment ourselves. We have also been affected by the pandemic,
having lost one of our dedicated staff members to the virus.
In the end, I know we share a common goal: to provide economic
relief to American small businesses. We will continue to do our
very best, and we will continue to work closely with you to achieve
that goal.
Thank you.
Chairwoman VELÁZQUEZ. Thank you, Mr. Rivera.
I now recognize myself for 5 minutes.
Mr. Rivera, SBA received approximately $2.7 billion in funding
for salaries and expenses to fulfill your mission to deliver the PPP,
EIDL, and other agency programs to struggling small businesses.
What portion was allocated to the Office of Disaster Assistance?
How much has been spent? And what have been the biggest cost
drivers?
Mr. RIVERA. Thank you, Madam.
We received two sets of funds. We used $7 billion initially in our
existing disaster funds that was carried over from Harvey, Irma,
Maria on the loan side. On the administrative side, Congress was
generous enough to give us $470 million, and we are close to spend-
ing through that right now. The $2.1 billion we have planned out
over the next—I think it sunsets in September of 2021. So, we are
working through those funds right now.
Major costs, to answer your question, we have 7,000 employees;
we have close to 2,000 contractors. We are running a 24/7 operation
at the call center. So a lot of these expenses that we have not had
in a natural disaster have grown exponentially with this effort.
Chairwoman VELÁZQUEZ. Okay. So you hired more staff. You
hired contractors to help you perform the duties of the office in pro-
viding assistance to small businesses.
And so that is one of the first issues that I raised, and I was the
one fighting here to get that money to you. Because I have been
on this committee for 28 years, and I know every time that there
is a natural disaster how bad the agency has failed. Because the
budget has consequences, right? And every time that the budget is
cut, manpower is going to be reduced. And here we are.
Of course, we provided the money to hire more staff and to hire
contractors, bring in contractors, but then there is the training and

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so on. So those are issues that we need to keep in mind, because
climate change is not going away, and we are going to be in this
position many, many times more.
Mr. Rivera, I have heard countless complaints about SBA’s poor
customer service. Applicants spent hours on hold, only to be told
their applications were pending and to check back again next week.
Why was SBA’s system unable to provide more detailed informa-
tion regarding the flow of the application through the approval
process?
Mr. RIVERA. Let me, if I can, take you back to mid-December.
We have this system internally that we use to respond to—natural
disasters; it is the Disaster Credit Management System 2.0. We
used that for the first 2 to 3 weeks.
When we received the opportunity to do a grant program—which
we have never had a grant program on the disaster loan side—we
pivoted to an existing contract that we received post-Harvey, Irma,
Maria. It was a surge contract that enabled us to rebuild it.
And, looking back, we should have had visibility, no doubt about
it, similar to the way we have with the disaster loan application
portal. What happened is, in our angst to get this service out and
get to this new portal, we did not have visibility in the application
portal.
Once an applicant gets invited into the loan queue or to the
grant queue, there is visibility. But, in hindsight, we should have
added that additional visibility that we didn’t have.
Chairwoman VELÁZQUEZ. At the Senate hearing a few weeks
ago, Administrator Carranza said that the SBA was working to add
more visibility to the automated system. When will that be com-
pleted?
Mr. RIVERA. So, we don’t have any loans in the application
queue anymore. Everything has been processed. Since we have re-
opened the portal, we have received close to an additional 2 million
loan applications. Everything is in the loan queue, so there is visi-
bility from that perspective, and all grants have been processed.
Chairwoman VELÁZQUEZ. So why, then, did she say that the
Administration was planning to add more visibility?
Mr. RIVERA. I think if you go back to the June 15 date, that
is just the amount of applications we had in the queue. I think it
was a timing issue.
Chairwoman VELÁZQUEZ. Okay. Thank you.
So, Mr. Rivera, we understand that SBA limited the size of the
EIDL loan to $150,000. What percentage of applicants had re-
quested and, based on the EIDL calculation, should have received
more than $150,000?
Mr. RIVERA. So, currently 80 percent of the applications are
below $150,000. The average loan is $61,000 overall. We have 19
percent of the applications that are at that $150,000 threshold.
Chairwoman VELÁZQUEZ. Okay. So can you answer my ques-
tion, just the percentage of people that applied for $2 million
that——
Mr. RIVERA. Right.
Chairwoman VELÁZQUEZ.—didn’t receive it and just got
$150,000?

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Mr. RIVERA. So, Madam, I don’t have that information because
we——
Chairwoman VELÁZQUEZ. Can you please forward that infor-
mation to us?
Mr. RIVERA. Sure. But we determine economic injury. You can
request whatever you want, but it is based on 6 months of working
capital.
And I think we could have done a better job of communicating
that it is based on 6 months of working capital. It is not based on
whatever loan amount that you are requesting. It is different than
a traditional bank loan, from that perspective.
Chairwoman VELÁZQUEZ. Okay.
My time has expired, and I now recognize the Ranking Member.
Mr. CHABOT. Thank you, Madam Chair.
Mr. Rivera, I have heard from many small businesses and nu-
merous Members of Congress about the lack of communication
coming from the SBA, with regard to the EIDL Program specifi-
cally.
How can we work together to ensure that small businesses re-
ceive the most up-to-date information on EIDL assistance? And are
there any programmatic changes that we need to consider?
Mr. RIVERA. The last, gosh, 3 months have been a tough road,
obviously. This is a national footprint; it is not a regional disaster,
from that perspective.
We have learned a lot from a communication perspective. And to
answer your question, we need to do a better job of getting what
the program guidelines are out there and being able for all small
businesses to understand.
We thought we were communicating pretty well from the per-
spective of when we talked to each individual business owner; they
knew exactly what we were trying to do and what we were trying
to address their needs. But there is always room for improvement,
and we are willing to work with Congress, however you see fit.
Mr. CHABOT. We definitely would want to work with you on
that, and I think both sides. You know, this is a very bipartisan
committee, and I think we can work together with you to improve
this.
As we consider ways to improve the Federal response to this
emergency and emergencies in the future, do you believe that pri-
vate lenders could have a role within the Disaster Loan Program?
Mr. RIVERA. Let me state what we are actually doing.
We had the surge contract. We have actually used the surge con-
tract—I will hold back the name of the company. I can tell you off-
line if you want. But, basically, this company is doing what private
lenders are doing.
When we moved to this portal, they are processing the loan for
us. Under the traditional EIDL, the goal is two loans per day.
Under this contract that we are using, where we have this business
doing—this bank-type business doing an algorithm, we can do 25
loans a day.
So, we are using the private sector, in a private-public partner-
ship relationship, to process these loans. We could not have proc-
essed these loans on our existing platform. That is why we stopped

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for 2 weeks. We went and we built this portal with this company,
with this institution, and that is what has enabled us to do that.
Definitely, moving forward, this is the path forward. It has in-
creased the cycle times. It has increased the productivity. It has
helped us provide quicker, faster service, from that perspective.
Mr. CHABOT. That is good to hear. Because, obviously, injecting
some of the private sector and competition into the government—
which tends not to be, no offense or anything, a little less efficient,
because, you know, we don’t compete with others. They do. And we
learned that in the PPP program. You know, we had the private
sector out there make the loans, and I think that sped up the proc-
ess tremendously.
My next question: We know more about this emergency today
than we did in March. We are also starting to see some businesses
return under modified operations. Congress is currently debating
the Federal Government’s next steps as it pertains to this emer-
gency.
As we continue to have these discussions, where should we con-
centrate our efforts within the EIDL Program? Where should we
make adjustments to ensure the program assists current small-
business applicants? And how can we structure the program to be
flexible and nimble when the next disaster strikes?
Mr. RIVERA. Well, I have to thank the Committee and Congress
from the perspective of what you enable us to do. You eliminated
some statutory requirements. The ‘‘credit elsewhere’’ test is not re-
quired. We didn’t have to get Federal tax returns. So we went truly
with just a credit score, from that perspective. You have been very
helpful through this process.
As we continue to take a daily look at the amount of volume that
we have—we have 8 million applications—in relation to what we
process, we will continue to have that discussion, as far as other
opportunities that we may have.
Mr. CHABOT. Okay.
How are you and how should we measure the effectiveness of the
EIDL Program?
Mr. RIVERA. Effectiveness. I wish I could approve every loan. I
really do. We must have a credit standard. We are a loan standard.
I mean, our current approval rate is 51 percent.
One of the things that has been different with this new portal
is we have a DocuSign-type document where we are able to imme-
diately disburse within the next day. Generally, under the tradi-
tional process, it takes us 2 to 3 weeks because we are flipping
paper back and forth between us and the small business, where,
now, we are 99 percent disbursed.
So, of the $131.9 billion that we have approved, we have already
disbursed $130 billion to the small businesses. That is money in
their bank. I mean, it is a day turnaround time, from that perspec-
tive.
So, it has been a positive experience. That is one of the real les-
sons learned that we have used from a technology perspective,
using the algorithms, using those types of features.
What we need to figure out is how can we better improve on
these individuals, these small businesses that we decline. Many of
them received grants, you know, the advance, but we are going to

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come out with a lessons-learned, and we will be sure to share that
with you when this COVID period ends and we can move on and
look back from that perspective.
Thank you.
Mr. CHABOT. Thank you.
My time has expired, Madam Chair.
Chairwoman VELÁZQUEZ. Time has expired.
And now the gentlelady from Kansas, Ms. Davids, is recognized.
Ms. DAVIDS. Thank you, Chairwoman Velázquez and Ranking
Member Chabot, for holding this hearing today.
The Economic Injury Disaster Loan Program, or EIDL Program,
is definitely meant to provide an immediate lifeline to small busi-
nesses who are struggling to stay afloat during the coronavirus
pandemic. But I have heard from too many small businesses,
small-business owners in my community that, you know, they are
experiencing chronic delays, a lack of transparency in response to
their applications.
And I know we have kind of been talking about that this morn-
ing already, but, Mr. Rivera—first of all, thank you for joining us
today.
You know, as I have heard from my constituents and witnesses
in this committee that the Chairwoman referenced earlier around
their frustration, I am curious about, you know, whether or not you
all are working to provide more step-by-step information for appli-
cants and then, you know, whether or not you are going to be able
to have more frequent and open communications going forward. Be-
cause, you know, you are talking about the technological and oper-
ational work that you are doing, and I am just curious what that
is going to look like going forward.
Mr. RIVERA. The current portal that we are using is exclusive
to COVID. And what we have done is, we have 1 million to 2 mil-
lion individuals that are in certain parts of the queue, so we con-
tinue to communicate. We have reached out five, six, seven times
via email. We are calling these 1 million to 2 million people
through our call campaign. We are leaving messages.
If I could fast-forward to today, we are a better operation than
we were, you know, 90 days ago when we were standing up. Inter-
nally, we had to understand this new portal ourselves. So, in look-
ing back, we should have probably had better communications,
been a little bit more transparent when it comes to the 10 steps
in the process.
And that is kind of the tactical approach that we are doing right
now. As I have mentioned, everybody is in the loan queue. We have
processed all of the grants on the 8 million applications that we
have received so far. And we are still receiving, you know, 200,000
to 300,000 applications a day since we reopened the portal back in
mid-June.
Ms. DAVIDS. Thank you.
And then just really quickly, you know, the local SBA district of-
fice in the Kansas City metro area that serves the Kansas Third
has done a great job of outreach and has been great at commu-
nicating with my office and our constituents.
I am curious about, what kind of coordination is happening and
communication with district offices and our entrepreneurial part-

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ners? And are there ways that we can better utilize those district
offices for that function?
Mr. RIVERA. That is one of the things Administrator Carranza
reminds me daily of: no stovepipes, organizationally. We are very
collaborative with field operations. We thank field operations. They
have given us several hundred employees to help us process these
loans.
We have very clear communication. If there is a congressional,
for example, that comes in from your district, we have a direct line
of 20-plus disaster agents that can provide responses from that per-
spective. They do have other stuff other than COVID to do, but
they spend all their time between PPP and EIDL, as far as commu-
nicating back and forth with us.
Ms. DAVIDS. Thank you.
And, you know, the last comment I will make is just, I have ap-
preciated the Chairwoman’s work on helping us increase the trans-
parency around who has been receiving the various loans and
grants.
And, also, Mr. Rivera, I appreciate the work and your time today.
With that, I will yield back.
Chairwoman VELÁZQUEZ. Thank you.
And I am going to take the privilege of using 55 seconds to ask
you a followup question of the question that she asked, Ms. Davids.
And that is that, when we held a hearing here with SBDCs, all
our partners, they mentioned that they learned of changes made by
SBA on rules and guidance from the media. So you need to have
better coordination with the partners that are in the field, helping
them in providing the information—the most accurate information.
Mr. RIVERA. Yes, ma’am. We agree.
You know, Allen Gutierrez, the head of the Entrepreneurial De-
velopment, he is just right down the—5, 10 offices away from me.
The challenge we have is, this was such a new process for us
that, as we communicated internally, sometimes people got to the
media before we had the opportunity to get to our resource part-
ners. And we clearly understand that we have to do a better job
communicating.
Chairwoman VELÁZQUEZ. Okay.
So the gentlelady from American Samoa, Mrs. Radewagen, is rec-
ognized for 5 minutes.
Mrs. RADEWAGEN. It is a beautiful morning here in Pago Pago,
American Samoa, at 3:30 a.m. And I want to thank Mr. Rivera for
being with us today.
Mr. Rivera, can you explain the rationale for initially allowing
only agricultural-related businesses access to the EIDL portal for
weeks? That caused some confusion here in my home district.
And what do you think Members of Congress should focus on
within the EIDL Program as we debate the next steps?
Mr. RIVERA. Regarding the agricultural applications, we process
those concurrently. We set up a separate queue where we were con-
tinuing to process these loans that were in the queue, and then we
set up a different track for the agricultural enterprises. So, they
were being processed concurrently, you know, from that perspec-
tive.

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What could we do different? As I mentioned earlier, the ability
to let us not have to do a ‘‘credit elsewhere’’ test, the ability for us
not to have to get Federal tax transcripts, from that perspective,
a lot of those improvements have just been phenomenal and have
enabled us to have a more cookie-cutter approach in order to get
this assistance out as soon as possible.
Mrs. RADEWAGEN. Do you believe there is room for private
lenders to operate within SBA’s Disaster Loan Program moving for-
ward?
Mr. RIVERA. So, you know, as I mentioned earlier, we are using
a private-sector organization that has—we had a surge contract
post-Harvey, Irma, Maria where that is their portal. So you go into
the SBA website, you go up to their portal, they do the algorithm
with all the data that they are completing, and then they bring it
back to us for a team lead to do the decisioning.
Had we not had that relationship and had we not had that con-
tract, we wouldn’t have been able to process 25 loans, on average,
per loan officer per day. We would be probably at two to three
loans per day, which is not—that is not acceptable.
So, you know, we do take advantage of these opportunities with
these private-sector organizations. We had this contract in place
post-HIM.
Mrs. RADEWAGEN. Thank you, Madam Chair. I yield back the
balance of my time.
Chairwoman VELÁZQUEZ. The gentlelady yields back.
And now we recognize the gentlelady from California, Ms. Chu,
for 5 minutes.
Ms. CHU. Mr. Rivera, the CARES Act provided $25 million for
SBA to develop resources in non-English languages. And I do want
to recognize the agency for publishing several guides and trans-
lations in 17 languages.
Asian-American businesses have been particularly hard-hit by
the COVID pandemic. And nearly 175,000 Asian-American-owned
firms do business primarily in non-English languages. And, in fact,
one-third of the community is limited English proficient.
If SBA does not fulfill its mandate to reach these firms with in-
language materials and services, they risk being left behind during
our recovery.
The EIDL portal remains available only in English, and the
agency has still not updated Congress on what actions it is taking
to proactively reach out to business owners with limited English
proficiency.
So could you explain what specific steps your office has taken to
ensure that EIDL is accessible to business owners with limited
English proficiency, especially considering we provided $25 million
for SBA to develop resources in non-English languages?
Mr. RIVERA. Thank you, Congresswoman.
We translated fact sheets into, I think it was, 17 different lan-
guages.
And I am looking at the Chairwoman. I remember, during Hurri-
cane Maria, we choked when it came to the language services.
So, we have a $2 million contract where we use translators. We
have not heard anything, from the language services perspective,
when it comes to being unable to translate.

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We do understand that need. Our application is still in English.
We have an application in Spanish. And we will continue to try to
figure out how to get more languages as we proceed.
Ms. CHU. Like I said, you have been provided $25 million to
translate. And the reason that you haven’t heard anything is prob-
ably because those people with limited English proficiency are shut
out. So I would urge you to translate those applications.
Mr. Rivera, Congress took steps to ensure that sole proprietors,
independent contractors, and the self-employed were fully included
in the small-business recovery resources made available during this
crisis. And that includes the EIDL emergency grant program estab-
lished by the CARES Act, which Congress specified was to be val-
ued at $10,000 per applicant and, along with a traditional loan,
would work in concert with the Paycheck Protection Program.
EIDL would provide a quick injection of working capital to meet
operating expenses, and the PPP would enable businesses to retain
their employees.
I am deeply concerned about SBA’s actually rather shocking deci-
sion to cap the emergency grant at just $1,000 per employee, as is
inconsistent with congressional intent and has had a dispropor-
tionate impact on these independent workers, including so many in
the world-class creative economy in southern California.
These independent businesspeople also have fixed costs that they
are struggling to pay, and many creative industries in my district,
in fact, have halted production to comply with public health guide-
lines.
So you specified in your testimony that the SBA made adjust-
ments to the EIDL grant in order to make the funding last longer,
but how does the SBA justify cutting the grant’s value by 90 per-
cent for independent contractors and sole proprietors? Does the
agency have plans to make adjustments to the grant formula so
that it can meet the needs of these types of business owners?
Mr. RIVERA. We put a lot of analysis into these determinations,
these decisions. At the agency level, the decision was to do $1,000
per employee. If you were self-employed, you know, zero employees,
you received a $1,000 grant.
Had we used $10,000, we would have been out of funds imme-
diately. We did get the first $10 billion, and then we did get the
subsequent $10 billion. We are currently—I think this morning it
shows we are, like, at $15 billion, $16 billion. We would have been
run out of money.
And what we are trying to do, basically, is just provide as much
assistance across to as many small businesses as possible. And that
is the approach we took.
Ms. CHU. And why is it that you have not deputized SBDCs to
provide timely information?
Mr. RIVERA. I have to get back with you. I need to have a con-
versation with the Assistant Administrator. I thought we were pro-
viding clear guidance and clear communications internally.
As I mentioned earlier, the information we have internally some-
times gets out before we are able to distribute it through the entire
resource partner network.
Chairwoman VELÁZQUEZ. The gentlelady’s time has expired.
Ms. CHU. Thank you. I yield back.

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Chairwoman VELÁZQUEZ. And now we recognize the gentleman
from Ohio, Mr. Balderson.
Mr. BALDERSON. Thank you very much, Madam Chair.
And thank you for being here today with your testimony and an-
swering some of our questions.
A question I was asking was already asked by a colleague, but
I would like to expand on that a little bit. Mrs. Radewagen asked
you—and I want to continue from her question—about America’s
small businesses through previous disasters.
You used the example of Hurricanes Harvey, Irma, and Maria as
well as floods across the Midwest. Hurricanes Harvey and Irma in
2017 were just weeks apart from each other. For these 2017
storms, did SBA close the EIDL portal for one sect of the popu-
lation?
Mr. RIVERA. I am sorry. Can you repeat the last part of that
question?
Mr. BALDERSON. Yes. Did the EIDL portal for one sect of the
population—for these 2017 storms, did the SBA close the EIDL
portal for one sect of the population?
Mr. RIVERA. No, I don’t believe we did.
I mean, we are working on two different systems right now. We
have the Disaster Credit Management System that is handling all
non-COVID, and then this specific portal is specific to COVID by
itself.
Mr. BALDERSON. Okay.
Mr. RIVERA. We have done a billion dollars’ worth of natural
disaster loans this year that are non-COVID. So that track con-
tinues to go, you know, business as usual, from that perspective.
Mr. BALDERSON. Business as usual. Thank you.
Followup to that: During any previous disaster where EIDL
funds were awarded by the SBA, was it ever the policy to shut out
applicants from one disaster in order for other requestees to have
access to EIDL funds?
Mr. RIVERA. No, not that I am aware of.
You know, EIDL funds are 2 percent of natural disasters.
Mr. BALDERSON. Okay.
Mr. RIVERA. Most of the loans are to homeowners. A lot of peo-
ple don’t understand that Congress gave us the authority back in
1953 for homeowners. The lion’s share are homeowners and then
businesses. And then, as part of the business loan, there is an Eco-
nomic Injury Disaster Loan component.
But I am not aware of that, but I can check back with you if
there is a misunderstanding.
Mr. BALDERSON. No. Thank you very much.
And, Madam Chair, I yield back my remaining time.
Chairwoman VELÁZQUEZ. Mr. Balderson, would you yield for a
second?
Mr. BALDERSON. Yes, ma’am.
Chairwoman VELÁZQUEZ. So is your question related to the
fact that the SBA EIDL Program shut the portal just to allow agri-
cultural borrowers to apply for loans?
Mr. BALDERSON. Yes, Madam Chair.
Chairwoman VELÁZQUEZ. So he is asking you if there has been
in the history of the EIDL Program any time where one group is

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coming in, like the agricultural, the farmers, and then shutting the
portal for everybody else.
Mr. RIVERA. Well, we process concurrently. As I mentioned ear-
lier, we continued with the EIDL track, and then we had an ag
track continuously at the same time.
Chairwoman VELÁZQUEZ. Yeah, but these are COVID-19-re-
lated borrowers, farmers applying for loans. And non-farmers were
not allowed to apply, because the portal was shut down for them.
Mr. RIVERA. Well, the—oh, I am sorry. I understand your ques-
tion now.
Chairwoman VELÁZQUEZ. Why did you make that decision?
And who made that decision?
Mr. RIVERA. It was an agency determination.
Chairwoman VELÁZQUEZ. Why?
Mr. RIVERA. Because Congress gave us the authority to make
loans to farmers. Disaster wasn’t able to make——
Chairwoman VELÁZQUEZ. But Congress didn’t give you the au-
thority to shut down the portal to every other borrower that was
injured by COVID-19.
Mr. RIVERA. Right. But since we have opened the portal up
since June 15, I mean, we accepted those 500,000 applications that
were in the queue. So, I mean, they delayed maybe, what, 2 weeks,
3 weeks?
Chairwoman VELÁZQUEZ. Do you realize how many borrowers
were calling our offices, crying out because they needed assistance
and the portal was shut down for them——
Mr. RIVERA. Right.
Chairwoman VELÁZQUEZ.—and clearly stated——
Mr. RIVERA. I understand.
Chairwoman VELÁZQUEZ.—shut down for you but open for ag-
ricultural.
Mr. RIVERA. I understand. And I apologize for not answering
your question earlier. I didn’t quite understand.
Mr. BALDERSON. I may have asked it incorrectly, so that is
okay. Thank you.
Mr. RIVERA. No, no. Thank you.
Chairwoman VELÁZQUEZ. I just would like to have a sense as
to why that happened.
Mr. RIVERA. Why the portal was only open for ag businesses?
Chairwoman VELÁZQUEZ. Uh-huh.
Mr. RIVERA. Because, at the time, the decision was, let’s let the
ag businesses get in.
We have not had authority for agricultural enterprises since the
mid-1980s, so we had to stop and we had to retool the system. And
then, during that period of time, we also got additional funding. We
didn’t have funding at the time. We needed to get the additional
$50 billion. I mean, so there were some stops and go’s.
From the intent of why we went ag only, that was an agency de-
cision.
Chairwoman VELÁZQUEZ. Okay.
I yield my time from Mr. Balderson.
Mr. CHABOT. Thank you.
If the gentleman would yield, I will be very brief.

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Just for those dozens of people who might be watching at home,
the thing that we have to have out there is the fact that the EIDL
loan program was not open to agriculture or farming originally,
and then we passed legislation to open it up to the ag community.
So, for a period of time, it was only open to the ag community, al-
though the applications were still there, and then it has reopened
again.
So, I mean, that was the reason behind this. Because it hadn’t
been open, so you had people in the ag community that weren’t
even eligible for a long time. Then they were.
Now, I mean, I understand why we might at this point argue
with that decision. I had people in my district that were not ag
that were wondering, why can’t we get this?
But that was the reason, correct?
Mr. RIVERA. Yes, sir.
Mr. CHABOT. Okay.
Thank you.
Chairwoman VELÁZQUEZ. Badly communicated to the general
public.
Mr. RIVERA. I understand.
Chairwoman VELÁZQUEZ. Now we recognize the gentlelady
from Minnesota, Ms. Craig, for 5 minutes.
Ms. CRAIG. Thank you so much, Madam Chairwoman.
Mr. Rivera, I am sitting here, and this isn’t my prepared ques-
tion, but I just want you to understand, if you really believe that
‘‘The agency could do better’’ is the best response to the perform-
ance—you know, I have a lot of businesses in my district who, if
this were the kind of customer-service level that they had provided,
they would be out of business 3 months ago.
You know, I am sitting here today going through my email, be-
cause I have folks in my district who applied and heard crickets
for months. No response from the EIDL Program application.
I have a gentleman in my district who finally got a response from
you that there was missing information on his application. And we
even elevated this to the regional acting director in my office. We
were told there was a 24-hour email line that Members of Congress
could use in order to help our constituents get a response on their
EIDL loan applications. Nine days later, we got a response to that
email that says there was missing information, and still not telling
us, so that we could tell our constituents, what information was
missing or what was needed to help that application.
So the Chairwoman has brought up the lack of communication,
but I am just telling you, in case no one else on your team is telling
you directly, that the customer-service levels our constituents are
facing is terrible in this program.
And I understand—I spent 22 years working in business before
I came to this Congress and came to this committee, so I under-
stand the volume. I understand that you guys are under a lot of
pressure to respond here.
But 6 days ago, I sent a response, again, asking for someone,
please, to help this constituent, and I am sitting here today and
still we have no response. And I am a Member of Congress. I can’t
even imagine what is happening on a daily basis inside the cus-
tomer service group.

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And so, you know, I just want to make sure no one is sugar-
coating this for you, because I am not going to sugarcoat this for
Minnesotans or for the American people. The administration of this
program has been absolutely terrible.
I just want to say also that, you know, I understand this meeting
is about EIDL. And I didn’t come here today—I came here to ask
a question, but somebody has to tell the truth about what our con-
stituents are facing.
And I appreciate the hard work you have done, Madam Chair-
woman, to finally get a member of the SBA to come in front of this
committee.
I have sent a number of letters to the Administrator, Ms.
Carranza. And I want to make sure that, during this hearing, I
also have an opportunity just to say that the response on the PPP
program has been equally unacceptable.
I understand that, for a recent GAO report, your Administration
waited until the very last day to respond to requests for data to the
Government Accountability Office and only replied when that data
had already been made public.
Why are loan-level data not being released at this time, even to
the Government Accountability Office?
We need a commitment to release a comprehensive list of firms
who applied for and received aid under the PPP. We need to make
sure that transparency is essential to understand that these funds
went to good use. See, that is our role as Members of Congress, to
make sure that we are doing the best job that we can to oversee
the use of taxpayer dollars.
So, Mr. Rivera, I want to just say, I appreciate you being here
today, number one. I know that this isn’t going to be all that much
fun. But I want to make sure you understand that what has been
happening, understanding there have been a lot of challenges with
the volume, is simply unacceptable.
Mr. RIVERA. So, thank you for your comments. We don’t take
it lightly when we are not providing the customer service that we
need to do. If we can talk offline, we can see whatever the issues
are.
As I mentioned, you know, this morning’s report. We get individ-
uals on the loan side through in 5 days; grants, 2 days. Was the
service slower before? Yes. Are we still getting—you know, 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. And if there are opportunities on how you can help us or
if we need to get better service with you, just let us know; we will
be glad to provide that service.
Ms. CRAIG. That is what I was told a month ago.
Mr. RIVERA. Okay. Well, I will continue to do my best. I don’t
know what else to tell you from that perspective.
Ms. CRAIG. Thank you, Madam Chairwoman. I yield back.
Chairwoman VELÁZQUEZ. The Chair recognizes the gentleman
from Oklahoma, Mr. Hern.
Mr. HERN. Thank you, Madam Chair.
Thank you for being here today and answering questions regard-
ing the EIDL Program.

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I always find it interesting when we complain about inefficiencies
of government yet have colleagues who want to make it bigger. It
has always been perplexing. Because I have been around, as you
can tell from a few gray hairs, a while, in business for 35 years,
and I can’t think of any agency in government that has ever been
very efficient, as compared to industry that is accountable directly
to a customer for its existence.
With all that said, we have spent a lot of time—in fact, all of our
time—here today talking about the current history of the program
and how it has compared to other programs that you have been in-
volved in, with either 9/11 or geographies, wind disasters, and
things like that.
I would ask you to compare those two. I have heard a lot of this,
as it pertains to business interruption insurance, why it is not via-
ble for a national pandemic or a national disaster versus a localized
geography disaster.
One thing I would ask you—and I think this would be a very bi-
partisan request that shouldn’t be controversial at all. It should
give you a chance to perform at a very high level. There is very
fresh, this is very raw, these comments coming from here and from
your customer base, the people applying for the loans.
Could you commit to us between now and the end of the quarter,
now that we are in a new quarter, Q3, so prior to any potential ad-
ministrative changes, you know, people running the agencies or
whatever, could you commit to us about assembling best practices
that you have learned from this that you could apply?
It is very difficult to take—and I know you have done it with
your experience—try to take a localized disaster and extrapolate
that across a national disaster. You have tried to do that, and you
are a little behind the eight-ball on that, or a lot behind the eight-
ball in certain areas. But it would be very easy to take a national
pandemic disaster and localize it.
So if we could get from you a commitment from you at this hear-
ing today that 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 who you should communicate to and when
you should communicate it and what should be communicated.
Because we can all sit here and talk about learning, as we did
in our office, about the $150,000 cap from The New York Times or
The Wall Street Journal or the Washington Examiner, we could go
through all of these different things; it doesn’t solve our problem,
and it doesn’t prevent those problems from happening in the fu-
ture.
We need, kind of, skin in the game, a commitment in the game,
because then that carries on beyond the ideas and the things that
are going to make it work in the future when this happens again—
and we hope it is a long time and none of us are here when it hap-
pens again—but those in the future. Because I think history mat-
ters. It matters a lot. It identifies what we shouldn’t do again and
what we should do right the 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 as we go forward.
Can you commit to that?

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Mr. RIVERA. Absolutely.
Mr. HERN. So September 30, 2020?
Mr. RIVERA. Absolutely.
And if I can just have, like, 15 seconds.
Mr. HERN. Sure. You can have a minute and 34 seconds.
Mr. RIVERA. Okay. Thank you.
COVID—viruses were not in the Small Business Act before
March the 15th. We weren’t responding to COVID.
We do have a playbook. You know, we have the Disaster Pre-
paredness and Response Plan. It is for natural disasters. I think
we have proven ourselves when it comes to a Harvey, Irma, Maria
footprint. You know, we had a 15-, 20-day response——
Chairwoman VELÁZQUEZ. Not in Puerto Rico.
Mr. RIVERA.—for——
Mr. HERN. Mr. Rivera, if I may, though. I would acknowledge
that you have those. And that is because we have all had to deal
with regional disasters.
But now we have, in our lifetime, in our legislative lifetime, in
your administrative lifetime, executive branch lifetime, you have a
national pandemic. And we don’t have that, from 1918 Spanish Flu,
to rely on now. Because I would imagine, many of the things that
we had then, sans the technology, would be doing the same. We
would be communicating in a different format then, but we had the
ability to instantly communicate.
And I had people calling me, like many others did. They thought
they were going to apply for a $2 million loan. They go through all
the process and told $150,000, and, in their mind, they have wast-
ed a lot of time. They could have gone to a bank and stood up their
business quicker.
So there was just this lack of communication, which is usually
what destroys most relationships and everything that we do. So if
we could just get a communication process plan that, again—and
I took a minute and 20 seconds of your response time.
But I am acknowledging that you have good regional disaster
plans, because we, unfortunately, have to deal with them time and
time again, year after year. But it could be 20, 30, or 40 years
again, but we will indwell forever in the congressional records and
possibly through legislation a process for how to handle national
epidemics/pandemics as we go forward.
Mr. RIVERA. Yes, sir.
Mr. HERN. Thank you.
Mr. RIVERA. Thank you.
Mr. HERN. I yield back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
And now we recognize the gentleman from Minnesota, Mr.
Stauber.
Mr. STAUBER. Thank you, Madam Chair.
And I appreciate, Mr. Rivera, your being here.
You know, we know that the Small Business Administration was
really given a nearly impossible task. Overnight, they were asked
to assist every single small business across our Nation that fell on
hard times. And I commend the work you have done thus far, but
there is a lot more to do.

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I do want to share some concerns that were brought up here ear-
lier from my constituents. It seems that the SBA has taken some
liberties to reduce the cap of loans given out, from $2 million to
$150,000. While this is likely to ensure the maximum number of
businesses receive some sort of funding during this crisis, my con-
stituents are rightfully upset. They feel they are being cheated out
of what they were promised by our government.
With that said, I will be focusing my line of questioning on the
portal.
Can you share with us what the SBA is reviewing exactly when
an applicant sees, quote, ‘‘Processing’’ in the EIDL portal?
Mr. RIVERA. Sure.
This is the first time—because we used a streamlined applica-
tion—we actually identity-proofed every small business that came
in. So, for example, the business name needed to be the same as
the name on your checking account. We identity-proofed addresses.
We identity-proofed a lot of these processes.
As we moved the small business from the application portal into
the loan portal, that was a quick credit check based on a credit
score. And once you passed that credit score, then we determined
economic injury, 6 months of working capital.
That is what the loan was based on—working capital, economic
injury. It is pretty simple. It is sales minus cost of goods sold, so
whatever the gross profit was. That is basically your loan, from
that perspective.
The EIDL loan program is meant to pay for fixed operating ex-
penses. It is not for expansion or, you know——
Mr. STAUBER. Right.
Mr. RIVERA.—similar to 7(a), 504s.
But those were some of the requirements that we looked at.
Mr. STAUBER. Okay. With that being said, what is the average
time between an application being submitted and the decision
being made?
Mr. RIVERA. Currently, we are running 41 days. For the 5.5
million applications we process, we are running 41 days.
Mr. STAUBER. So what is the hurdle that slows this process,
from the time the applicant——
Mr. RIVERA. Well——
Mr. STAUBER.—comes to 41 days?
Mr. RIVERA. Yeah. The staff, the amount of volume, standing up
the portal.
We had three stops in this process that is included in the 41
days. We ran out of money. We had $7 billion; then we got the ad-
ditional $50 billion.
We had to build the portal for—we had to stop and do a new ap-
plication when we got the grant program. We had to stop and do
a new application when we got the ag component to it.
So, there have been three hard stops in that process.
Mr. STAUBER. So my colleague from Minnesota brought up a
good point. When you have an application and they have waited
days and days and they call and you have said it wasn’t filled out
correctly, is there a faster way to do that immediately?
Mr. RIVERA. Yeah. So, we have learned a lot when it comes to
filled out correctly. We weren’t requiring tax transcripts. We

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weren’t requiring any other due diligence. It is a self-certified form,
from that perspective.
So, I need your help if you have examples of where you say that
somebody said it wasn’t filled out correctly. I am kind of curious
to see what exactly they are being asked for.
We are very crisp on, when we do the decision, we decision it and
then we move on. And then they have the opportunity to come back
for reconsideration.
Mr. STAUBER. What is the SBA doing to ensure applicants have
the most access to the information, guidances, status updates, and
other important information during this economic downturn?
Mr. RIVERA. Yeah. So that is one of the things—looking back,
specifically for the EIDL Program, we didn’t have a transparent
portal for the small-business owners as we do with the Disaster
Loan Application Portal. Congress gave us that directive years ago,
so we built this portal so you can go in and you can figure out
where you are at in the queue, from that perspective. We didn’t do
that. In hindsight, we should have done that. And, you know, that
is a lesson learned that we have.
Mr. STAUBER. Well, I appreciate you being here and taking our
questions. I mean, the goal is, when you know better, you do bet-
ter. This pandemic came to our shores through no fault of our own,
and we are going to get through this together. But we need you
and other members at the SBA to really understand livelihoods are
at stake, much of our economy is at stake, and small businesses
are the engine of our economy, and we are going to need much
more help.
And I yield back. Thank you.
Chairwoman VELÁZQUEZ. The gentleman yields back.
And now we recognize the gentleman from Florida, Mr. Spano,
for 5 minutes.
Mr. SPANO. Thank you, Madam Speaker. I appreciate that.
And I just would like to associate myself with many of the com-
ments related to concerns expressed about communication. I will
say, in my district, I got literally hundreds of calls with respect to
the frustration that business owners were having getting informa-
tion and not having questions answered and so forth, not knowing
about the status of their applications. And so, just want to reiterate
that. We can do better, and we have to, frankly.
What is the current level of funding that remains under the
EIDL Program?
Mr. RIVERA. So, we have $360 billion, and we have loaned $130
billion——
Mr. SPANO. Okay.
Mr. RIVERA.—so what is that?
Mr. SPANO. About——
Mr. RIVERA. 230.
Mr. SPANO. 230. Okay.
Mr. RIVERA. Yes, sir.
Mr. SPANO. Do you have any projections as to how long those
resources will last, given the current run?
Mr. RIVERA. We do that in-house daily. We have a meeting with
the Chief of Staff, with the Chief Financial Officer, with the Chief

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Operating Officer. There is a team of about five, six individuals,
and we do that analysis daily, from that perspective.
We have a queue of 8 million. We feel that we can—there is room
with 8 million, at some point. I am not sure when.
Mr. SPANO. All right.
Mr. RIVERA. But we do that analysis daily.
Mr. SPANO. Your best guess would be, we are going to run out
in a month? We are going to run out in 3 months?
Mr. RIVERA. No, I am not——
Mr. SPANO. What would you say?
Mr. RIVERA. I apologize, I am not in the guessing game.
Mr. SPANO. Yeah.
Mr. RIVERA. This analysis is pretty comprehensive. It contains
a lot of factors—our approval rate, how many applications are
pending——
Mr. SPANO. Okay.
Mr. RIVERA.—from that perspective.
Mr. SPANO. Let’s go this route. At the current rate, the burn
rate, what are you extending in loans per week right now?
Mr. RIVERA. We are running—and I can share this information
with you. I mean, we have had some big weeks. Last week, we did
$14 billion in approvals.
So, you know, our biggest week was the week of May 31, $24 bil-
lion. By the way, Katrina, Rita, Wilma was $11 billion, so we did
two Katrinas in a week—Katrina-Rita-Wilmas in a week.
So, you know, I haven’t put the math on this $14 billion, $15 bil-
lion, but if you are looking at 200-and-something, a couple of
months.
Mr. SPANO. Okay.
Over the last couple of weeks or several weeks in June, let’s say,
has the number of loans extended gone—or the amount of loans,
given has it come down each week?
Mr. RIVERA. We have fluctuated between 200,000—I mean, the
week of May 31, we did 400,000 approvals; the week of June 7,
200,000; the week of June 14, 300,000; the week of June 21,
300,000. So, it is pretty steady-state.
Mr. SPANO. Okay.
One of the things that has been mentioned was the decision to
cap the amount of the grants at $1,000 per employee. That was my
understanding. Why was that decision made? And second question
is, was that communicated to applicants and was it communicated
to Members of Congress prior to the decision being made?
Mr. RIVERA. So, the decision was based on—at the time, we had
$10 billion. We have approved 4.8 million applications, so we would
need $48 billion. We have 20. So we based the 1-to-10 based on,
you know, some due diligence we did. We communicated when we
had the discussion with the small business committee.
Mr. SPANO. Okay.
Mr. RIVERA. We didn’t communicate, you know, the 1-to-10
ahead of time, and, in hindsight, we probably should have.
Mr. SPANO. Yeah, I think that probably would have been a good
idea, because we were getting calls from our constituents saying,
I just got $3,000 dumped into my account last night, but I have no
idea why it was $3,000.

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Mr. RIVERA. No, that is a really good point.
Mr. SPANO. Yeah. Yeah. So that would be helpful. I think that
goes in line, again, with the importance of communication, I think,
that some of the other members have expressed concern about.
That is all I have. I yield back. Thank you.
Chairwoman VELÁZQUEZ. The gentleman yields back.
And now we recognize the gentleman from Illinois, Mr. Schnei-
der.
Mr. SCHNEIDER. Thank you, and good morning. And sorry, I
was on the floor speaking, so I am just getting here and catching
up, but wanted to touch base.
I know this has been a challenging time for the SBA over the
last several months. It is a challenging time, obviously, for our
country. I had a conversation on Monday with the Administrator,
talking about some of the issues we face with the EIDL Program.
I know I heard from so many people about the uncertainty—we
are in uncertain times, to begin with. This virus, the pandemic, the
response has created so much anxiety for businesses. Will they be
able to get through just day to day? And we piled on top of that,
unfortunately, with so much of the stutter steps and challenges we
faced with the loans.
In my own district, as an example, we had a wonderful webinar.
The SBA folks in Illinois are working so hard and just, you know,
bending over backwards. But they told our businesses—and there
were 1,000 people on this call—that they would have a decision
within 21 days—or, the money within 21 days and the advance,
$10,000 advance, within 3 days. Obviously, that didn’t happen.
So I guess where I would start with is, you know, we are where
we are now. We have the decision of the $150,000. We have the
change in how that emergency $10,000 was let out. June 30 has
come; it is July 1. What do we tell to our businesses? How do we
give them the confidence that the SBA is going to be there for
them, is going to give them the information?
You know, I can order a pizza and track it from the time of order
to delivery, every step along the way, and know when it is going
to arrive. Our businesses should be able to at least have a similar
sense of, when they apply for a loan, how much they are going to
get and when they are going to get it.
Mr. RIVERA. So thank you for spending some time with the Ad-
ministrator in the call that we had on Monday.
So, today—let me fast-forward to today. Over the last—since the
beginning of time since we started this in mid-March, we are run-
ning about 41 days to fully process these loans, approve/decline,
from that perspective.
What are we doing right now? I looked at this morning’s report.
We are processing grants in 2 days. We are processing loans in 5
days. Everything has been processed that is not in this application
portal; it is in either the loan queue or the grant queue, from that
perspective.
So, you know, in hindsight, I wish we could have been quicker.
I wish we could have maybe been a little bit more communicative,
now that I am hearing a lot of——
Mr. SCHNEIDER. This is going to come off more harsh than I
mean it, but, you know, we went through this crisis, we did try to

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slam a whole lot through a small pipe in a very short time, but,
being perfectly honest, when I hear, ‘‘We are doing really well
now,’’ that is kind of like the diner saying, ‘‘We got crushed at
lunch, but at 3:00 in the afternoon things look fine.’’
But I know there is going to be a dinner hour. I know that, as
these loans, the money that companies have borrowed is consumed,
they are going to need to come back and they need more help. I
am confident that, in a bipartisan way, we are going to find a way
in Congress to help these companies.
What is the SBA doing today, in that afternoon lull, to make
sure that when we get to the next rush that we won’t fall back into
the 41-day timeframe?
Mr. RIVERA. Well, we don’t consider 2 million to 3 million appli-
cations in the queue a lull right now. I mean, we are still working
7 days a week, you know, the 10 to 12 hours a day.
We have learned a lot, but what I meant to say or what I in-
tended to say is that we are a better organization today than we
were when we started this process back in mid-March. The system
is working faster. We have individuals through the queue. We have
gone from 1,000 employees up to 7,000 employees. We are better
trained, we are better prepared, as we continue through this jour-
ney.
Mr. SCHNEIDER. Are there specific changes that you have to
improve that? Are the changes completed and ready to go? And if
they are not completed, what is the timeline to get them complete?
Mr. RIVERA. So, we are pretty complete from the perspective of
things we have learned as we go through. I mean, every week, we
have a different build to address a specific issue. So we are in a
good place right now, but we still do have a lot of work that we
need to complete.
Mr. SCHNEIDER. Okay. And I know this is changing week to
week, but that is one of the frustrations so many businesses had,
is that things kept changing week to week coming from the SBA
and Treasury. The instructions kept changing on the EIDL loans.
There was an Application 1 and then an Application 2, uncertainty
of whether I was going to keep my place in line if I did the first
application when I applied for the second application.
I know we are going to have to be flexible, we are going to have
to adapt, because this virus is so dynamic. But what confidence can
you give not just me and my colleagues but every small business
in this country that the SBA is going to provide some stability in
this storm?
Mr. RIVERA. Well, I mean, we pride ourselves on customer serv-
ice. I know we have not been successful, in many individuals’
minds. But we have provided this $130 billion to 2.1 million small
businesses that employ 11 million people. I mean, so I think we
have had some level of success.
Could we do better? Always. I mean, we continue to strive to be
the best. And that is why we continue to have these weekly ses-
sions where we try to figure out what is the challenge that we need
to address next and continue on.
Mr. SCHNEIDER. Okay. And I don’t want to question your in-
tent or any SBA employees’ intent. I know how hard everybody is
working. I know that we are asking the world of you. But, at this

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moment, in this crisis, we need the world from you. And we are
here to give whatever help we can, but we really need the SBA to
step up and deliver in the next round.
With that, I yield back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
And now we recognize the gentleman from North Carolina, Mr.
Bishop, for 5 minutes.
Mr. BISHOP. Thank you, Madam Chairwoman. And sometimes
there are advantages, I think, from being dead-last or close to
dead-last.
Thank you, Mr. Rivera, for being here.
I want to take a moment to say how excited I am that we are
back in our committee room or in a committee room. I think it ben-
efits the dynamic, and for those who can or desire to be here, we
can have that interaction in person.
I want to thank, momentarily here, Joe Hartz of our Committee
staff for his work in enabling me to do that even when we weren’t
in a committee room.
And in the comments, I think, here on the topic, Mr. Rivera—
and I thank you. I was listening to the arrows coming at you, and,
you know, maybe some of them are partially deserved, and you
have to take them all.
I want to associate myself with the comments of Mr. Hern, in
particular, and I wanted to sort of strike a balance in what I ask
you. Because I do think it was striking to me, reading your testi-
mony—and there was one part I wasn’t 100 percent clear on. And
the numbers probably would, you know, make people’s eyes glaze
over a little bit. But when you talk about, you know, all of the dis-
aster loans approved by the SBA since 1953, you know, this was,
like, by a factor of a couple more bigger than that. I think I have
that right.
And even if you get down to businesses, I think it said all the
business disaster loans up until COVID-19 are, like, 20.9 billion.
And then the numbers—I don’t think this is just business loans,
but the ones approved as of June 26, over 125 billion. It is just a
ton of work that you were saddled with.
I do have this observation, though. As I heard, you were talking
about a 41-day turn time. When Congress—and my being a new
Member—when Congress first appropriated money in that pre-
CARES Act to the Disaster Loan Program, I was gearing up to go
out and evangelize that. And then I heard from talking to the re-
gional administrator in my State that it took 30 days, roughly, to
get a loan out, and I was like, ‘‘Whoa, why so long?’’ And then I
talked to a Member who said the Disaster Loan Program is really
kind of a disaster.
And so I don’t know what the—I don’t have the experience to
know what the background was. So I have heard the Chairwoman
speak about it here today a bit, a variety of topics that have been
raised. I think the thing is that, you know, we have a culture in
which, you know, people expect pretty good speed, and they are
dealing with the private industry, Rocket Mortgage or whoever
else, and things happen pretty quickly.

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Do you try to establish standards, though, for the program, not
just in this crisis period but before, to compare yourselves in terms
of speed and efficiency and effectiveness to the private sector?
Mr. RIVERA. We do.
As I mentioned, when I was first having this discussion with Ad-
ministrator Carranza—we have a Disaster Preparedness and Re-
sponse Plan. It has four levels: you know, zero to 50,000 applica-
tions; 50 to 250; 250 to 500; and 500-plus. We give ourselves 15,
30, 45, 60 days. That was out of the window day one. This COVID
is not the disaster model that we have ever followed. We had to
just start from scratch.
We do use that private-sector company that does lending, and we
use that platform, but we had to stop for 2 weeks in order to de-
velop that platform, because, you know, I can’t survive—‘‘survive’’
is not the right word—but two loans per loan officer per day is not
acceptable. I mean, we are doing 25-plus.
So, we are trying to use as many private-sector best practices
that we can. Had we not had that Harvey-Irma-Maria contract for
surge, we would have had to have gone out.
So, we thought we were prepared. We learned a lot.
Mr. BISHOP. Yeah.
Mr. RIVERA. The level of preparedness is just something that
we need to continue to work on.
Mr. BISHOP. You mentioned one thing that struck me, that you
began to use DocuSign. And what struck me about that, frankly,
was, people have been using DocuSign with me as a private indi-
vidual for a decade maybe, maybe more. Why not earlier on things
like that—that as an example and things like that?
Mr. RIVERA. Yeah. That is part of being the government. We
are just trying to use the money as judiciously as possible.
But it is a proven fact now, we can get a disbursement out in
a day. So everything is digital from that perspective. The platform
is there. We just haven’t gotten around to spending the money for
that, but now that we have that, I mean, that is the path forward.
Mr. BISHOP. I think, bottom line—I will say this—I think some
of the blame is borne by Congress. We appropriated money to that
program. I was ready to go out and sell it, tell people that was a
path for relief. I think those Members in Congress had a reason to
know that that was going to be a problem, and those expectations
were, in part, created here.
I do commend you, and I encourage you to think of the private-
business way as often as possible, because I think if you are chas-
ing a service standard that you see in the private sector, you are
probably going to do a better job than excluding that from your
thought.
Thank you, sir.
Mr. RIVERA. I understand. Thank you.
Chairwoman VELÁZQUEZ. The gentleman yields back.
And we are going to go to a second round for any member who
wishes to make any questions.
I have two or three questions, Mr. Rivera.
So you said before that the denial rate was 48 percent, right?
Mr. RIVERA. Yes, ma’am.

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Chairwoman VELÁZQUEZ. And that represents, out of 5 million,
2.5 million people.
Mr. RIVERA. Yes, ma’am.
Chairwoman VELÁZQUEZ. So what recourse does an applicant
have if they feel they were wrongly denied? Who conducts those re-
views, and what is the average processing time?
Mr. RIVERA. So, when we decline somebody, we give them re-
consideration rights.
We went off strictly a credit score. I mean, that is the fast proc-
ess that we used. When we go under reconsideration, we ask for—
if they are a self-proprietor, we ask for a copy of a Schedule C or
some type of business application that shows—because there may
be repayment ability even though you have a lower credit score.
That is the historical approach——
Chairwoman VELÁZQUEZ. Okay.
Mr. RIVERA.—so we are using that approach.
Chairwoman VELÁZQUEZ. But you just said that this pandemic,
or this disaster, is unprecedented. There is no comparison. So why
is it that you didn’t consider the national impact of this pandemic?
Did SBA at any time consider modifying the underwriting mini-
mums?
Mr. RIVERA. Well, the credit score we use is D paper, if you look
at the private sector. It is not A, B, C. It is D paper. The credit
score is pretty low. And, unfortunately, I mean, we have to set up
a standard, and that is the standard we use. We could have low-
ered it, but the risk associated with lowering it was the decision
we didn’t make.
Chairwoman VELÁZQUEZ. Okay.
So what do you need today from us?
Mr. RIVERA. I think we are in a good spot. Obviously, we need
to do better communication——
Chairwoman VELÁZQUEZ. Okay. So let me ask you, given the
fact that we have seen a spike in the virus in different places and
also that some States are either shutting down or halting reopen-
ing, those businesses are going to be impacted. Florida, Colorado,
Arizona. Do you expect for many more millions of businesses to
apply for the disaster——
Mr. RIVERA. So the declaration period for the Economic Injury
Disaster Loan Program is 9 months. It runs from the middle of
March to the middle of December, I mean, so we will continue to
process any applications we have, you know, as long as there is
funding available.
Chairwoman VELÁZQUEZ. As long as the money is there. So my
question is, do you think that, based on what is left—how much
money is left in the EIDL Program?
Mr. RIVERA. We had $360 billion, and we have spent $130 bil-
lion, so we have $230 billion.
Chairwoman VELÁZQUEZ. And so are you making or doing any
economic impact of the trend that we are seeing in other States?
Mr. RIVERA. We are responding to the 8 million applications we
have. I mean, we have not done the analysis of another pandemic,
from that perspective, I mean, but we do a daily analysis on how
much money is left and what is in the queue.

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Chairwoman VELÁZQUEZ. So this is the thing. You, the Admin-
istration, requested $50 billion. I supported $100 billion, and SBA
said that they needed half of that. It is showing that you needed
more than half of that.
Mr. RIVERA. I am not sure how I am supposed to respond to
that. I mean——
Chairwoman VELÁZQUEZ. Okay. Well, I am just warning you.
Mr. RIVERA. Okay. I understand.
Chairwoman VELÁZQUEZ. My time has expired.
The Ranking Member, Mr. Chabot.
Mr. CHABOT. Thank you, Madam Chair. I won’t use the whole
5 minutes, but just a couple of followup questions.
Mr. Rivera, I think, when asked about the period of time that it
was ag only that you were accepting, agriculture only applications,
I think you said 2 weeks.
In conferring with my staff, we seem to think it was longer than
that. Maybe from mid-April to mid-June, approximately, that it
was only ag applications that you were taking. Can you clear that
up?
Mr. RIVERA. I need to fact-check myself.
Mr. CHABOT. Okay.
Mr. RIVERA. I will get back with you on that.
Mr. CHABOT. Okay. That is fine. I am not trying to put you on
the spot, but I do think it is longer than that. Because I know we
were getting inquiries not only from people in my district but talk-
ing to other Members of Congress as the Ranking Member of this
Committee, and it was, I think, an extensive period of time. So if
you could check on that, we would appreciate that.
And then, on that same topic, on that ag-only period of time, just
for future reference, it would seem to me that there was maybe
some more reasonable accommodation to those folks who were not
ag during that period of time.
Since ag folks didn’t have access, I certainly appreciate you
might want to get more of those folks, because now they are eligi-
ble, so you want to take care of them. That is certainly understand-
able. Maybe just, you know, pulling something out of the hat,
maybe 50/50 or so, to say, okay, 50 percent is going to be set aside
for ag, because you have never had it before. But there was still,
I think, a considerable need, demand, for non-ag small businesses
who needed these EIDL loans.
So, just for future reference, I would just suggest considering
something like that or consulting with Congress. Because we really
didn’t have much, if any, input. Some of those decisions were com-
ing out, and we were having considerable difficulty getting our
phone calls responded to—understandably. You were very, very in-
undated with trying to help people all over the country, and that
was your number-one priority. But, just for the future, we can get
better, I think.
If you want to comment, go for it.
Mr. RIVERA. Understood.
Mr. CHABOT. Sure.
Mr. RIVERA. Thank you.
Mr. CHABOT. Oh, you agree.

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Mr. RIVERA. Yeah, no, I agree. I think the communication piece
needs to be——
Mr. CHABOT. I appreciate that.
And then, finally—and this is something we have all said, so I
am not going to beat a dead horse here, but the frustration on both
sides of the aisle. More than anything else, we just need to commu-
nicate better with each other—the Administration, the Congress—
so that we can communicate with our constituents all over the
country, who are, after all, the backbone of the American economy.
Half the people who work in America work for a small business.
About 70 percent of the new jobs created in the American economy,
small businesses.
So, you know, you all just need to communicate better with us
and the American people so that we can communicate better with
the American people too. Okay?
Mr. RIVERA. Okay.
Mr. CHABOT. Thank you.
Mr. RIVERA. Thank you.
Mr. CHABOT. I yield back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
And now we recognize the gentleman from Pennsylvania, Mr.
Evans, for 5 minutes.
Mr. EVANS. Thank you, Madam Chairwoman, and thank you for
your leadership on this discussion.
When the EIDL Program first launched, many business owners
in my district were very excited. However, that excitement has
turned to frustration. Many constituent business owners have
reached out to my office because they are waiting weeks or months
to hear anything about their EIDL application. They were denied
EIDL loans because of unsatisfactory credit scores, including my
constituents.
Now, the Chairwoman raised this in her introduction discussion,
and the pharmacist that she talked about is someone who is in my
district who testified before this Committee.
All except one of the constituents denied—one Black. In fact,
Black business owners in the U.S. have declined the most of any
ethnic group, at 41 percent. This is quite concerning, coming from
the city of Philadelphia, where over 40 percent of the population
is African American.
In addition, the information contained in the denial letter from
the SBA was very sparse, as SBA did not indicate what application
credit scores it was looking for.
So the question I would like to ask: The CARES Act provides the
SBA may use alternative appropriate methods to determine an ap-
plicant’s ability to repay beyond their credit score. Does SBA con-
sider applications based on criteria other than credit scores? That
is the question I would like to ask you.
Mr. RIVERA. So, to respond to your question, we started with
credit score as part of the streamlined application, and if you want
reconsideration, you can provide us with a copy of your tax return.
We can get a tax transcript through the IRS. I mean, that was
something that was waived by Congress.
So, we use that as an indicator. And, you know, if the businesses
come back and they ask us for additional assistance because they

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were declined, we can determine cash flow based on what they
have reported, you know, to the IRS from a tax transcript perspec-
tive.
Mr. EVANS. Uh-huh.
I would like to then follow up with a couple other questions.
Do different staff from the Office of Disaster Assistance handle
the non-COVID disease loan applications?
Mr. RIVERA. So, we have a dedicated team that is working on
natural disasters. We have done a billion dollars’ worth of natural
disasters this fiscal year. We did $500 million in Puerto Rico from
the earthquake that was earlier this year. And then we have dedi-
cated teams that work on the COVID effort.
Mr. EVANS. Is the processing time for these applications still
within the normal timeframe?
Mr. RIVERA. Well, according to our historical goals, we were
supposed to process 500,000 applications in 60 days. We have done
5.5 million in 41 days. So, we are exceeding the internal goals. But,
the goal is a goal; we need to get the assistance out as soon as pos-
sible, from my perspective.
Mr. EVANS. Is there a need for additional staff?
Mr. RIVERA. We are at 7,100 employees. We haven’t stopped
hiring. We are trying to get as many staff on board—one of the
things—and let me just, if I can pivot for just a second. We talk
about the private sector. We contracted with a company that allows
us to have call agents 24/7. So we are open. And it is just based
on need.
It has been a phenomenal contract. It enabled us—of the 7,100
employees we have, I would say probably 2,000 to 3,000 are con-
tractors. We have a traditional model where we have 1,000 core
employees and we have 2,000 to 3,000 reservists.
So, you know, the combination of all these different factors is
what we used in responding. We haven’t stopped hiring, though.
We will continue to hire until this event is completed.
Mr. EVANS. One last question. If you had to rate the program
yourself, particularly relating to how the African-American commu-
nity is affected, how would you rate it at this point?
Mr. RIVERA. So, we don’t collect ethnicity or race information in
the Disaster Loan Program. We haven’t collected that information
since 1994. We don’t know who an applicant is, you know, from a
race perspective. We treat all applicants equal. From our perspec-
tive, a disaster is a disaster, and we focus on the disaster survivor
and the small business, in this case.
Mr. EVANS. Yeah, I understand that, but I guess what I am ask-
ing is, from a processing standpoint, I am not asking if you do it
based on race, but in terms of how you think it has been effective.
Because you obviously heard people raise questions about its effec-
tiveness.
Mr. RIVERA. [Off-mike.]
Mr. EVANS. Hello?
Chairwoman VELÁZQUEZ. He cannot hear you.
Mr. RIVERA. Sorry. We—I forgot what I said. We——
Chairwoman VELÁZQUEZ. Well, time has expired, if you don’t
mind. But you could answer his question.

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Mr. RIVERA. So, we process—so, if I am a small business—you
know, 41 days sounds great for me. But if I am the small-business
owner and needed money in day 5, day 10, you know, that is the
relevant point. So, we are trying to get the job done as soon as pos-
sible.
Chairwoman VELÁZQUEZ. Time has expired.
And now we recognize the gentleman from North Carolina, Mr.
Bishop.
Mr. BISHOP. Mr. Rivera, I am pleased to have an opportunity
to pursue that just a little bit further. You just said 41 days sounds
good to you. And just give me a little bit more insight. I am a
layperson from the perspective of how you originate loans.
I have heard in the course of the hearing, listening carefully,
that you were absolved of the obligation to do some things. Like,
getting a tax transcript in each case is not necessary. You have to
do some things to identify people, confirm the identification. I get
that. I don’t know whether there might be some shortcuts. I know
you have to get documents signed. We talked about DocuSign, and
disbursing that could be done pretty quickly. I heard that you have
the credit score, which is a significant piece of information.
What else has to be done by a loan officer?
Mr. RIVERA. The loan officer historically gets—in an 8-hour day,
they got 4 hours to review the credit. We now give them 15 min-
utes. So we have really streamlined that process. I think the chal-
lenge we just had was basically the sheer volume we have experi-
enced.
Mr. BISHOP. Okay, but what are they doing in the course of
that review? For example, if you have a range of credit scores that
are acceptable to SBA—and I am a loan officer; I don’t need 15
minutes to look at that credit score. I am trying to understand
what else they have to do——
Mr. RIVERA. Okay.
Mr. BISHOP.—to examine an application.
Mr. RIVERA. No, I understand.
So, 30 percent of our applications are what we call auto-ap-
proved, and a team lead just needs to—it is an inherently govern-
mental position, that a team lead needs to approve that applica-
tion. We can’t let the system do it.
So, the other 70 percent, they just go through and they check the
variables. They call the small business, and they fact-check some
of these different variables.
Mr. BISHOP. Like what?
Mr. RIVERA. Location, address. Sometimes their bank account
doesn’t match their business name, so can you provide us evidence
of something that shows those things connecting, from that per-
spective.
Mr. BISHOP. Okay.
So you said—and then help me with this part. So, if you said
that—I think you just said a processor gets, like, 15 minutes to
look at an application. And based on the things you just told me
about, I am not sure it takes 15 minutes, but 15 minutes is 15 min-
utes. Help me understand, then, why 41 days sounded pretty good.
Mr. RIVERA. Well, I am just saying, 41 days, from my perspec-
tive, based on the traditional goal of 15, 30, 45, 60, I mean, we beat

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the 60-day goal. My intent was not to say we are satisfied with 41
days.
Mr. BISHOP. Yeah.
Mr. RIVERA. Obviously, we want to provide the fastest assist-
ance available based on the plan, the historical disaster plan.
Mr. BISHOP. Yeah.
Mr. RIVERA. That is what it is based on. And, you know, there
is a reasonableness from a time perspective. If we could have done
it in 15 days or 30 days, I mean, we would have done that.
But the point today is, I mean, we are doing these in 5 days right
now——
Mr. BISHOP. Yeah.
Mr. RIVERA.—for the current queue. Going back, we have
learned a lot.
Mr. BISHOP. Right. And I hear you. And I think that is maybe
the nature of the rub, if you are talking about expectations or peo-
ple being dissatisfied. The customer is always right when—rule
number two is, you know, refer to rule number one, the customer
is always right.
But I think it is hard—and even when I interact with you as a
layperson about that origination process, I go, ‘‘Hmm.’’ That seems
like that could get done—particularly if you are excused from a lot
of the requirements by the legislation, you know. Maybe, if Con-
gress had looked at it again, they might have said ‘‘without regard
to credit-worthiness,’’ I don’t know, and excused you from having
to look at the credit score. But that doesn’t seem like that takes
very long. I think those are the things that people find difficult or
frustrating.
And the other thing, just to balance that—again, I think balance
is appropriate. And maybe to balance Congresswoman Craig’s com-
ment about interacting with your congressional liaison, we had the
opposite experience in my office. That is, we had a situation where
someone’s PPP loan, to make a different reference, had gone awry,
not because of anything SBA did, but because the financial institu-
tion submitting it—there was a snag. And they were able very
quickly to tell us that there was no loan. They followed up and
said, ‘‘You have to give us an EIN number.’’ And then they re-
searched it and came back, and we were able to pinpoint the prob-
lem and get it solved for that constituent.
So I am sure there are differing stories, but that ought to always
be the objective, obviously, is to respond in a substantive way and
quickly to Members of Congress, and with more than just a put-
off or a repetition of a previous statement. But appreciate, in that
case, it worked for us.
Mr. RIVERA. I understand.
Mr. BISHOP. And any comment you have on that I would wel-
come in the 30 seconds I have left.
Mr. RIVERA. And if you have any suggestions, we always look
forward to any suggestion that we can work with you on ways to
process or streamline this process. I am open.
Mr. BISHOP. My experience was positive. Thank you, sir.
Mr. RIVERA. Thank you.
Chairwoman VELÁZQUEZ. The gentleman yields back.
The gentleman from Illinois, Mr. Schneider, is recognized.

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Mr. SCHNEIDER. Thank you, Madam Chairwoman, and thank
you for indulging us and offering a chance.
Mr. Rivera, you mentioned some numbers for the EIDL Program.
I just want to clarify them. Of the $300-plus billion that was—you
know, how much has been lent out so far?
Mr. RIVERA. As of this morning, we have loaned $132 billion.
Mr. SCHNEIDER. So more than $200 billion still left to lend?
Mr. RIVERA. Yes, sir.
Mr. SCHNEIDER. So, I guess, I have to go back to this arbitrary
cap of $150,000. I know so many businesses who needed more, ap-
plied for more, and were told, you can’t get more. What are they
supposed to do?
Mr. RIVERA. Well, so I think, in some situations, what we
learned is—when you apply for a loan, we don’t ask them what the
loan amount is. We base it on 6 months of working capital. So,
there was a little bit of a misunderstanding on the communication
piece.
We go back to what you have generated over the last 12 months,
based on your sales, costs of goods sold, whatever your gross profit
margin. We took 6 months, and that is what we loaned——
Mr. SCHNEIDER. You didn’t cap it at $150,000?
Mr. RIVERA. No, what I am saying is that that is the loan
amount that was determined.
We started at 500, but I think if we would have done 500, I don’t
know—the decision was—let me take you back. The decision was,
we had $50 billion. You know, leveraged it seven times. We had 5
million applications. We could not have done a $500,000 loan at the
time.
So, there was a lot of analysis, whether it was 2 months of work-
ing capital, 4 months of working capital, 6 months, and we did all
the variables, and the decision was made by the agency to move
forward with the $150,000.
Mr. SCHNEIDER. All right. So I don’t do math that well—actu-
ally, I do. But if you have lent out $100 billion, there is $200 billion
left. That is roughly a third of the program. If I take $150,000, if
you had done $450,000, you would have consumed all the money.
Certainly more than $150,000.
And I have talked to so many constituents, not an insignificant
number, that have said, ‘‘We needed more money. We have com-
petitors who got more money than we did because they were earlier
in the queue. We are trying to compete.’’
And, you know, the $150,000, I just want to be clear, that was
a cap. It was a cap the SBA set. So that leaves two-thirds of the
money still left in the program.
Mr. RIVERA. So, I mean, I guess it is how you want to cut it.
I mean, the average loan, $61,000—and, you know, we talked about
80 percent are below the $150,000. I mean, our average size loan
for below $150,000—and I will fact-check myself—is, 40-something-
thousand dollars.
We did have, as you are mentioning, 19 percent at the $150,000.
So, admittedly, they would have had more eligibility than, you
know, the $150,000. One percent are above that $150,000. But we
have had more than 80 percent—average loan is $61,000.

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Mr. SCHNEIDER. Yeah. But it is like saying we are getting our
loans out in 41 days. Sure, 80 percent is a good number, but that
leaves 20 percent of the businesses who are getting just enough to
get close to what they need, but close doesn’t count it to paying the
bills that they are going to have.
Mr. RIVERA. But, remember, at the time, we also had PPP for
payroll. So, I understand—you know, the EIDL Program has ex-
panded—it is working capital; it is more than just payroll. So that
was kind of the dovetail approach. I mean, we had two factors. We
had, you know, the EIDL——
Mr. SCHNEIDER. All right. So I would like to explore this sepa-
rately——
Mr. RIVERA. Okay.
Mr. SCHNEIDER.—because it is a big issue, but I have a minute
and a half left, and I want to go on to another thing.
You know, you talked about, or you were asked earlier, how
would you rate the program. And I don’t want to rate—I know how
hard it was, and, like I said, I know how hard everyone is working.
And I don’t mean to be critical of all the employees, who are lit-
erally working 24/7. And I know that and appreciate that.
You know, when I did my consulting, I worked with small busi-
nesses. I would close the door with the management team and say,
‘‘All right, let’s start with a blank piece of paper. Forget what you
have. If you could start over, what would you do?’’
If you could start over—we are not in a private room, so this is
public. But if you could start over, if you could design this system—
because we know this pandemic is going to last into the future—
what would you do to make sure that we do a better job supporting
America’s small businesses?
Mr. RIVERA. Well, I think we had the right approach with the
surge contract. I mean, that is one thing that we did good. We
probably should have had visibility in the application portal——
Mr. SCHNEIDER. Okay, not looking back, but let’s look forward.
What can we, as Congress, give you to ensure—I want the SBA to
succeed, not just to clear the threshold but to blow it out of the
water, to be so good that people are coming back and saying, ‘‘We
thank God for the government because we were able to weather
this storm, get through this pandemic, and look to a future to en-
sure that our kids and our grandkids are going to be prosperous.’’
Mr. RIVERA. I mean, I think we can always improve, but with
turning a grant in 2 days and a loan in 5 days, I think that is pret-
ty good service, since we had these 2 million come in, you know,
since the portal—since the June 15 timeframe.
Mr. SCHNEIDER. Okay.
I am out of time, but I do want to say, Madam Chairwoman and
Ranking Member, thank you for having this hearing. Whatever we
can do to help the SBA succeed, count me in in doing it.
I yield back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
And now I recognize the gentleman from Pennsylvania, Mr.
Evans, for a question.
Mr. EVANS. Thank you, Madam Chairperson. Again, I thank
you. This is very important.

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I want to go back to something you said, where applicants who
are denied the EIDL loans are given the opportunity for reconsider-
ation. Can you describe this process, and how long does reconsider-
ation take?
Mr. RIVERA. The reconsideration process is, when they submit
information for us to determine their cash flow—I mean, I think it
is 65, 70, 75 percent of the loans are based on a lower credit score,
so we ask them for a copy of their tax transcript, or we get a copy
of the tax transcript from the Internal Revenue Service. So that is
the process.
There are eligibility cases where somebody opened a business
post-COVID, you know, post- that January date.
We try to work through all these issues. We have about 100,000
applications, I think, that are in the queue right now on reconsider-
ation, and we continue to work these as fast as possible. It is the
manual process, or it is the DCMS 2.0 process.
Mr. EVANS. Okay. I understand. What I want to get to, that
part, you said ‘‘manual.’’ You know, how long does it take in recon-
sideration? Can you quantify that?
Mr. RIVERA. Yeah. It is usually—it is taking right now—I mean,
I don’t have the statistic in front of me, and I can get back to you
for the record. I think it is taking 2 to 3 weeks, on average.
Mr. EVANS. Two to 3 weeks.
Mr. RIVERA. Yes, sir.
Mr. EVANS. So if an applicant is approved after reconsideration
but if they are no funds left in the EIDL Program, will there be
a remedy for the applicant?
Mr. RIVERA. Well, I mean, we have a couple hundred billion
left. So, I mean, it may at some point, but right now it is not an
issue.
Mr. EVANS. Okay. That is not an issue then. Right, right, right,
right, right.
The SBA is still processing EIDL and physical disaster loan ap-
plications for non-COVID disasters, such as those related to civil
unrest, tornadoes, and flooding. Processing these loans as they
come in, is the processing time for these applications still within
the normal timeframe?
Mr. RIVERA. Oh, yes, sir. I mean, we are processing these—I
think the goal right now is, like, 10 days, on average.
We declared a couple of counties in Illinois and a couple of coun-
ties in southern California for civil unrest, but we have booked a
billion dollars’ worth of non-COVID disaster assistance this fiscal
year.
Mr. EVANS. So you have booked a billion dollars for that?
Mr. RIVERA. I am sorry, we have approved a billion dollars’
worth of disaster assistance across the board. These are all disas-
ters. We had this earthquake down in Puerto Rico, we have had
floods, we have had tornadoes. We have had most of those type of
disasters.
You know, we generally do about $1.1 billion a year. That is
what we put in the congressional justification. So we are right on
track, that is just the path we generally take, the 10-year average.
Mr. EVANS. So the two places you have, you said, were Cali-
fornia and Illinois?

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Mr. RIVERA. Yes, sir. And we have a couple of——
Mr. EVANS. Yeah——
Mr. RIVERA. I am sorry.
Mr. EVANS. No, go ahead. You are saying California—there are
counties within California and Illinois you have approved then?
Mr. RIVERA. Yes, sir, for civil unrest.
Mr. EVANS. Okay——
Mr. RIVERA. We have—I am sorry. I keep interrupting.
We have six other, I think, pending requests that the State is
working on assistance from. I don’t have that information here
with me, but I can get back with you for the record.
Mr. EVANS. Yeah, I would interested, if you would relay that to
the Chairwoman and pass that on to the Committee.
I appreciate, you know, all you are trying to do, and I know it
is not easy. But I appreciate the Chairwoman for having this hear-
ing, because, you know, transparency and openness, as she has
talked about, is extremely important. Because you have people out
there, you know, who hear about it, and through no fault of their
own—maybe the pandemic or civil unrest, neither one is the fault
of their own.
The execution, you can understand, is something that is very im-
portant. Am I correct?
Mr. RIVERA. Oh, yes, sir. We definitely understand that.
Mr. EVANS. Right.
I thank you, Madam Chair, for allowing me this time, and I real-
ly appreciate all you have done on this, okay?
Chairwoman VELÁZQUEZ. The gentleman’s time——
Mr. EVANS. Thank you. I yield back.
Chairwoman VELÁZQUEZ. Thank you.
Mr. Rivera, thank you again for your testimony on the SBA’s
EIDL Program and its performance in response to COVID-19.
I understand the historic and unprecedented demand for the pro-
gram and that it may have been challenging to process applica-
tions. However, it is 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 raised, whether in hearings or phone calls coming in from
constituents.
Also, you need to improve SBA communications with the author-
izing committee, both the Senate and the House. It is two bodies;
it just can’t be the Senate. You have to improve your communica-
tion with this Committee.
And as Congress continue to seek ways to help businesses that
need relief in order to survive the pandemic, I would implore you
that you send to us any request that you consider is essential in
order to perform your responsibility of providing economic relief to
the businesses that we are supposed to serve.
So I ask unanimous consent that members have 5 legislative
days to submit statements and supporting materials for the record.
Without objection, so ordered.
And if there is no further business before the Committee, we are
adjourned.
Thank you.
[Whereupon, at 11:58 a.m., the Committee was adjourned.]

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APPENDIX

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SHA-256: 09df0cf96c5a324376f13e014133cbe8472dff542035a0bd36f2ec2a2ffabc68
Our copy: chrg-116hhrg41295.pdf
Original: www.govinfo.gov