Loans provided through the c. A. R. E. S. Act during the coronavirus pandemic. The House Small Business Committee held this hearing. I want to thank everyone for joining us this afternoon for our committees First Official remote hearing. I want to make sure to note some important requirements. House regulations require members to be visible through a video connection throughout the proceedings. So please keep your cameras on. Also, if you have to participate in another proceeding, please exit this one and log on later. You are recognized to minimize background noise. Over the last few months, the outbreak of covid19 has led to an unpresented Public Health crisis and dire economic crisis. We have lost over 10,000 people to the disease and 30 million remain unemployed. Back in february as the pandemic was getting worse, we knew we needed to take action to help our Small Businesses survive the economic downturn. We started working with the sba and governors around the country to leverage the sbas disaster resources available. Through the economic loan program. Can you please mute everyone should be muted. As the virus continues to spread, more state and local governments began imposing stayathome orders and business closures. We quickly realized Congress Needed to do more to meet the full scope of the problem and that is when we started working on what ultimately became the c. A. R. E. S. Act. To help Small Businesses and eligible nonprofits, congress created the new Paycheck Protection Program expanded eligibility to the idle program and provide payment and interest relief for current sba borrowers. I worked tirelessly to secure 10 billion in funding to create a new idle Emergency Program which was designed to get money into the hands of struggling Small Businesses quickly. Borrowers could request an advance of up to 10,000 within three days of applying. It need not to be repaid even if the applicant was eventually denied the idle. And due n n n n n n n n n n n nn infused another 10 billion and an additional 50 billion in the loan program as part of the paycheck program. They hired staff, upgrade technology and ultimately respond to demand in a timely, efficient fashion. Despite these steps and more than three months after Congress First enacted legislation to provide Economic Relief to Small Businesses, borrowers are still reporting significant challenges. For example, loans are supposed to have a maximum loan size of 2 million. We learned that sba imposed a maximum loan size of 150,000 shortchanging millions of Small Businesses. Unfortunately we also learned that sba is limiting the crucial grants to 1,000 per employee. And some are not even receiving the grant at all which is simply unacceptable. [ inaudible ] the positive impact this program could have on Small Businesses who need the help the most. We have heard that the sba has not communicated effectively with applicants nor has it provided them with reliable [ inaudible ] to check the status of their applications. Applicants need to know where they stand in the queue to approximate how much longer they can expect to wait to receive financing and given the current economic climate, if they are going to be denied, they deserve timely action so that they can explore options for capital elsewhere. These are just some of the reports the committee has received with the sba administration of the programs in the current covid19 era. As the commit undertakes its oversight duties we want to hear directly from Small Businesses who have applied for the program so that we can understand the successes and challenges they have experienced. However, in order to fully perform our work, we also need to hear from the Small Business administration. Without their appearance and testimony before this committee, it would be difficult to make additional changes to the agencys programs. Early today the administrator testified before the senate Small Business committee and it is my hope that she will testify before us soon as well. With that, i look forward to hearing from our witnesses about their perspective on how congress can keep working to improve the program and on where we should focus our oversight efforts i. Yie efforts. I yield to the Ranking Member for his Opening Statement. Thank you, madam chairwoman for holding this hearing. I would like to comment about the virtual format that were having here today and i do not hold you responsible for this, but i think the speaker should have the house of representatives in session, we have an awful lot of important work to do. Obviously, relative to Small Businesses. But there are so many other issues that the country is facing right now. Congress ought to be together. We represent the American People and dealing with these various challenges that our nation has before us. We have to be here. I happen to be in washington right now. Im in my office because im also on the Judiciary Committee and we have a hearing going on as i speak with relative to the tragic killing of george floyd and the aftermath of that. I was there this morning. After i give my Opening Statement, i have to go back there because ill be asking questions shortly here. But, again, i dont hold you responsible, madam chair. Youve done a tremendous job. I would prefer if you were the Ranking Member rather than the chair. I do think you do a great job. But congress should be in session and i cant emphasize that strongly enough. Relative to the eidl loan program, it operates within the sbas Disaster Loan Program and it was already up and running as we know long before the covid19 swept across the globe. Its important to note that the progra had its trouble in the past, but it was consistently making improvements. Created by it was supposed to be a Regional Program that provided assistance to Small Businesses after a disaster. Covid19 has presented numerous challenges to the program. The economic downturn caused by the Coronavirus Crisis is completely overwhelmed the eidl program. As the crisis unfolded, the lines of communication from the sba to bids about the eidl program has deteriorated. Additionally, the total loan amount and the grant amount available within the program continue to be uncertain. These hurdles and roadblocks have impacted the Small Business ability to make critical decisions during these uncertain times. Thus far the program has provided assistance to over 1 million Small Businesses all across the country to the tune of approximately 80 billion. In my home state of ohio, for example, its provide over 25,000 loans for a total of over 1. 7 billion. Today communication is slowly improving but certainly more work needs to be done and i commend you, madam chair, for holding this hearing in order to assist us in getting that job done [ inaudible ] we obviously sent a letter together in a bipartisan manner just recently urging the sba that they have a lot of things they have to improve on. Its critically important that we have this discussion to understand how Small Businesses have faired during this crisis and how congress can work to make improvements. Throughout this entire crisis, ive joined dozens of my house colleagues on Conference Calls and town Hall Meetings and a whole range of calls with Small Businesses in their districts. Questions on the eidl program were raised on a great many of these calls. And obviously their principle interest was in the ppe, the Paycheck Protection Program, but the eidl loan program is still there and dramatic improvement is needed. Congress has worked in a bipartisan manner to improve the Paycheck Protection Program. We must Work Together to ensure that the eidl is operating efficiently and effectively for Small Businesses during this pandemic and following. I look forward to discussing solutions can all of our Witnesses Today. Its important that we move forward with reforms that deliver for Small Businesses in my district and your district and districts all across the country. And, madam chair, following my Opening Statement i have to go back to the floyd and judiciary hearings. I will be heading over there. Im not sure if ill be back in time for the questioning part. I want to thank you for holding this hearing and i yield back. Thank you. I have news for you, you might have to wait a little longer. Okay. To go from ranking to chair. [ laughter ] i would like to take a moment to explain how this hearing will proceed. Each witness will have five minutes to provide a statement and each Committee Member will have five minutes for questions. Please ensure that your mic is on when you begin speaking is that you return to mute when finished. With that, i would like to thank our witnesses for taking time out of their business schedules to join us. With us today, we have the owner of the coworking space in los angeles area. After a career in works, she started his business in august of 2015 and taught herself how to write a Business Plan to get started. In just four years, her business successfully grew into two locations right before covid19 struck. She applied for an eidl but encountered many of the challenges that have been reported with the program. Thank you for joining us today and for sharing your experience. I now would like to recognize the vice chairman of the committee, mr. Evans, to introduce our second witness. Thank you, madam chair. I like the sound of that. We have a pharmacist and owner of christian street pharmacists located in the diverse neighborhood of south philadelphia. He has owned and operated the pharmacy since he graduated from Pharmacy School 33 years ago. Hes a lifelong resident of philadelphia where he attended two of my districts many excellent colleges, Temple University and the Community College of philadelphia. I could not ask for a greater representative from my district to speak with the Small Business committee on this important topic. I commend your commitment to serving and supporting the amazing citizens of philadelphia and thank you for participating in this hearing. I yield back to the chairwoman. Thank you, mr. Evans. And now i would like to recognize mr. Schneider of illinois to introduce our third witness. Thank you, madam chairwoman. It is my great pleasure to introduce my constituent and to thank him for sharing his perspective with us today. He lives in High Land Park and has practiced ophthalmology for the past 20 years. He runs the Eye Institute jointly with his father who started the practice more than 50 years ago. He earned his medical degree from the chicago medical school. He serves as an assistant professor of ophthalmology at northwestern university. I appreciate him sharing his perspective as a Small Business owner navigating both the complexities of this pandemic but also the challenges he faced with his eidl alone. Thank you for joining us today, craig. Thank you, mr. Schneider. And now i would like to turn it over to mr. Bishop to introduce our last witness. Thank you. Our next witness is karen kerrigan. [ inaudible ] also known as the sbe council. She has multiple decades of advocating for Small Businesses and the entire Small Business ecosystem with an expertise in startup funding in business growth, she serves on numerous boards and coalitions. Welcome and, madam chairwoman, i yield back. Thank you. Thank you, madam chairwoman, and the entire committee on Small Business for asking me to come here today and share with you the challenges that i faced when applying and receiving the eidl loan. Like she said, i own and operate a coworking space in california. Im not from l. A. I was born and raised in ohio. Ive had a lot of great accomplishments in my life, but outside of marrying husband, nothing has made me prouder than opening the rooms. Its a coworking space and we provide a work space for entrepreneurs, creatives and Small Businesses. We offer desk space offices and meeting rooms. It started with my idea in august of 2015 and within three months we opened. We were so successful that that summer we decided to open our second location in burbank and we were able to expand our first location. Within 4 1 2 years we had expanded to 14,000 feet with over 120 members. Then covid hit. We shuttered our doors on march 17th prior to mayor garcettis stayathome order. We suspended our billing because how can you charge somebody if they cant use your service. Then we the sba announced their loan and then i worked with the l. A. Network to get all of my ducks in a row to apply. There was a ton of paperwork that was required. On march 23rd, i started the loan process and this is when i started up loading my documents. And over the course of the next seven days, i was on hold for more than 25 hours and i had uploaded my application, i had faxed it, i had emailed it and each time i was told, no, no, youre doing the wrong thing. Just got to go to this new portal, supereasy. I went to the new portal and it was supereasy. So easy in fact that i didnt get an email confirmation that i had applied. I was smart enough to write down my loan number so i had a point of reference. I was always told, youre going to get an email to log into the portal, youre going to be able to talk to somebody, theyre going to look at your documents and tell you how much money youre going to get and it should be 2 1 2 times your monthly bills. Im not making my money and my bills are stacking up. On the 21st of april i received my advance. It was only a grand because i dont have employees. My neighbor next door, he had already gotten funded and he had received more than what he thought. So over the next ten days, i called several times wondering what was happening because nothing was being communicated. No emails. No answers and when you call you get a different each time. On may 1st, my credit was pulled and i got really excited. I got two landlords with their hands out. I have no income. I call, i get the same story, dont worry. May 16th i got that email and when i logged in to see the amount that was being offered, it did not even cover one month of my expenses. So i called and i was told by the woman on the phone, she read a statement to me for people who were calling in requesting more money than what was being offered and she told me this, that in order for all businesses to get a little money, they were limiting the amounts distributed and, remember, that this was when they were supposed to be giving up to 150k. I was taken aback. I was update. I had no one to talk to. I couldnt call anybody and no one to plead my case to. So the sba eidl loan that i thought was going to save my business has now put me in a position that guarantees that im going to have to close one of my locations. And i dont know how long that will last. The stress of covid was bad enough. Seriously, this sba loan experience, the 58 days of not knowing anything, on top of covid, this has been the most stressful period i have ever experienced, ever. Its been horrendous. Look, my entire business is built on Customer Service. Good communication is king. And let me tell you, without that, you are sending businesses into absolute chaos and i thank you for my time. Thank you. Your time has expired. You are recognized for five minutes. Hello, can you hear me . Yes, we can hear you. Thank you for the opportunity to testify before your committee today and i do apologize for the problem im having with my camera. Im very computer illiterate. My son set this up, and of course, today its not working. It worked last night. We did a dry run. But i would just like to thank you and to just basically highlight the testimony that i wrote and i hope you have in front of me. Very quickly, as congressman dwight evans stated, im a longtime resident of philadelphia, pennsylvania. I came here very young as an infant with the great migration from the south. My folks were from south carolina. They left after my father got out of the navy, after world war ii, and came to philadelphia. He wanted to have a better life for me and my other Seven Brothers and sisters. Ive been here at christian street pharmacy since about 1987 and over the years the area has changed tremendously. When i came down here, it was known for the the word was moral hazard. They wouldnt give me insurance on the building because it was predominantly black and red lined. Fast forwarding to 2020, it is about 90 white. Its been genert fied. Im landlocked. I have cvs four blocks away from me, walgreens, two blocks away from me, and im still in the process of holding on to the clients that i had prior to this. Pharmacy, unfortunately, is a very narrow profit margin Busines