The Small Business committee will come to order. Before i give my Opening Statement in regards to today subject, i do want to express all of our concerns about the devastation that is taken place in kentucky. The flooding has been just horrible to see. We know these Natural Disasters are very, very hard on the community. Our prayers are with those who have been victimized by the flooding. We recognize that there are many needs to how we respond as a nation to deal with this Natural Disaster. I know our country will do anything they can to see the resiliency of the people of kentucky. I say that particularly knowing that our Ranking Member, senator paul, represents the great state of kentucky. Our thoughts are with them. I also recognize the Small Business relief, only a quarter of that recovery. The announcing yesterday to provide relief to Small Businesses, nonprofits, homeowners, and ranchers in the regions. Small Business Committee will work with the s. P. A. To get this information to affected areas to help the people of southeastern kentucky get back on their feet. I want to thank senator paul for his cooperation in arranging for todays hearing. It is been a challenge for the schedule. Thank you for standing up and being willing to take on the responsibilities. We certainly understand it. He cooperated with us, i thank her for being able to take on this position today. Let me think patrick kelley, the associate administrator for Capital Access for being here today. And being willing to help us understand where we are in regards to the idol program. One of the most important functions of this committees oversight. Yes, we want to possess the right policies and make sure that they are adequately drafted, that you have the resources and the direction you need. But it is our responsibility to make sure these programs are being carried out as effectively as possible. We look at todays hearing, which is to oversee the Economic Injury loan program during covid. Recognizing that this is an incredible undertaking. In april 24th, 2020, 50 billion dollars of subsidies provided for the Economic Injury disaster long program under covid. On may the 7th, a Small Business administration announced that the program and imposed 150,000dollar cap, even though that Program Allows for those up to 2 million. The Trump Administration decided to limit that to 150,000 dollar cap. We were not happy with that. The members of this committee, as well as many members of the senate expressed our concern that 150,000 dollar cap was arbitrary. We wanted to see that implemented, the full amount that they authorized, 2 million. By july 20th, the spa had entered 3. 1 million loans 469 billion dollars. I repeat that again, 3. 1 million loans by july 20th. On april 21st, under the Biden Administration, april 21st of this year, they increased the cap from 100 50,000 to 500,000 and then in september, increased it to the full 2 million. We were all very priest about that. We are very pleased that they have been able to increase the total amounts available to the tune of 2 million. The Biden Administration deserves high marks for implementing the congressional intent to 2 million. The spa administered a program and now there is almost 4 million under the covid ill program. That is quite a record. Over the past two years, spa has brought this program following disasters. It is one of the federal governments primary tools for covid19 pandemic. The 3. 9 million idle loans, the spa has issued since april 2020, they are all the loans that have been issued during the entire history of the Disaster Loan Program. It just tells you how much additional responsibilities the spa took over and how they delivered in those programs. The idol loan program is a source of hope for Small Businesses, getting the critical capital they need during the pandemic. It provides a fixed rate, low interest, long term capital that is essential for Small Businesses. They dont have the resiliency, this gives them the hope of being able to stay in business. In december of last year, december 31st, no new applications were allowed. The spa basically closed the process for new applications. Here is where the confusion frustration comes down. Winding down the program. Here is where we are really baffled as to the way the information was received from the spa. On april 28th of this year, the spa said that funding was exhausted. On may 6th, they said the deadline for Loan Modifications, appeals, and denials for reconsideration. Yet, on april 11th, we were informed by the fda that it had 1. 3 billion dollars in transfer funds from the American Rescue plan. 1. 2 billion dollars available with regards to cancel loans. We didnt understand that they gave the explanation on april 28th that the spa, the funding had been exhausted. They said the date of april 16th for excuse me, they sent down another a notice on april 16th that all workable files have been processed. What im confused about, we have a large number of Small Business owners that are in the process, with their spa eyed alone, receiving information from the spa that they have exhausted funding and all workable files have been made. And yet, they have been notified in regards to their individual cases. On june 22nd, applications couldnt be processed because of a lack of funds. Another statement by made by the spa. Yet, in june on a staff call with administrators kelly, we were informed that 800 million were added to the program. There is frustration and anger out there. You have 41,000 applicants who have never received anything. You have 125 afghans who have been approved to have received their funds. I can tell you, i talk to my state workers all the time, fielding calls from the Small Business community, they all my frontline workers. They are Small Business owners that are really frustrated, they have gotten inconsistent information from the spa. They believe their applications have never been litigated, never been completed. They want to know why. They want a straight answer. As i said earlier, the Small Business community is the Growth Engine of our country. When renovation takes place, Small Business owners dont have the same deep pockets and resiliency they need to know what is going on with their applications. If they are ineligible, then declare them ineligible. Handle it, take an appeal, but dont leave them on the verge. I heard that this hearing will have an opportunity to get answers to those questions and that we can have the completion of that loan program done in a way that represents the values of our committee and a policy that we can develop for program that is so important to Small Businesses. With that, let me turn it over to senator burns. Thank you senator. I want to express my sympathies to those families and those communities that were impacted in kentucky, thank god all of us are watching and praying for the best, but understanding that this is a very difficult time for them. Thank you for mentioning that. Thank you as well chairman for holding this important hearing to discuss the spa assistance program. Before we move forward any further on this. I cant overstate how harmful inflation has been for Small Businesses in iowa and throughout the nation. As a part of my 99 county iowa, i spoke with Small Business owners who are continuing to tell me how record setting levels of inflation have created a significant financial burden across their value chains. The most recent Consumer Price index report shows that prices increased by 9. 1 over the last 12 months. The largest year over year increase in over 40 years. Over the same period, Producer Price index increased by 11. 3 . Indicating that most Small Businesses are experiencing increasingly diminished margins, impacting their ability to provide paychecks to working families, especially those that reside in my rural communities. Small businesses are the backbone of the american economy, despite being told otherwise. Small Business Owners know the impact of inflation on their businesses, it is not transitory, and it is proving not to be short term. This inflation crisis has created a hidden value tax that is deeply impacting their economic security. This is why it is deeply troubling to me that the democrats in Congress Plan to move forward with a reckless partisan tax and spending spree focused on raising taxes to pay for electric vehicles for the rich, hamstring our manufacturers, and all sorts of other pet projects of far left interest groups. The covid Economic InjuryDisaster Loan Program provided support for Small Businesses facing Financial Hardship as a result of the covid 19 pandemic. As the rush of pandemic aid went out the door, bad actors took advantage of the american taxpayers generosity. We now know fraudsters built millions and millions from s. P. A. And fraudulent loans from this program. As it transitions from supporting Small Businesses to servicing loans, i am concerned about the spa slack of a tentative to making sure that Law Enforcement has everything it needs wrongfully awarded dollars must be returned to the program and returned to the american taxpayer. Timely action is needed in order to do so. In a similar vein, the spa hasnt lawfully approved nearly 100 million in forgivable ppp loans to planned parenthood affiliates. They forgave 40 of these loans, despite being a clear violation of the affiliation rule. Yet, today, the spa has not launched an investigation into this issue, or made any effort to recoup the ineligible funds. It is critically important to protect the integrity of the Capital Access programs that are intended to provide support to Small Businesses from fraud and in eligible distributions. Mr. Kelly, thank you for appearing before us today. I look forward to working together in the future to ensure that taxpayer money is protected from fraud and bad actors are held accountable, thank you. Thank you senator. Thank you very much for your input. Im going to consent to put into the record letters that were written on may 6th, 2022 from senator and myself. July 15th, 2022. From a group of senators, headed by senator cornyn himself. In regards to our concerns as to why certain information was given to our constituents when we were told there was money available. Administrator, thank you for being here. As i pointed out earlier, we appreciate you research on this program. The office is pretty important to Small Businesses. The role of that committee has quadrupled, making more than that since covid19. We know that you have stood up an agency that was meant for a certain purpose that was really tested to limit, we thank you very much for that, thank you for being here you may proceed. Great, thank you chairman, thank you senator. I do want to extend my sympathies to the commonwealth. Obviously, 35 families today no longer have a loved one. There are hundreds of others who have not been found. As the chairman mentioned in his Opening Statement, President Biden declared a disaster area for the five counties. We will work to expand that if necessary. Obviously, we will work to help everyone. On behalf of the administrator, im happy to be here with this committee today to answer any and all questions. My name is patrick kelly, im associate administrator of the office of Capital Access with the spa. I have been since march, 2021. I would echo the chairmans comments regarding the work at the spa. It truly is a privilege for me to have a Second Opportunity to work with people during a time when so much was asked of them for the last 24 months. These are some of the best people ive ever worked with across the private sector and Public Sector. I will continue to enjoy the opportunity to serve the American People. We oversee a bunch of different economic programs and covid idle survey today. That particular program, as mentioned by the chairman, serviced about 4 million Small Businesses and roughly 400 billion in finance. The program also, 72 of those loans went to Small Businesses with ten or fewer employers. 50 of the recipients were not able to access the ppp program. One of the Great Success stories about this, what i have characterized as an uber credit program, is the success getting to all corners of our society. In addition to the covid ivo program, i will provide an update for you and the other members. We are working on forgiveness with the ppp program. We are approaching 2. 4 million loans out of 11. 4 forgiven. We expect the remaining million will seek forgiveness this fall as the april may june 2021 ppp loans hit their ten month mark and begin to make payments. We have provided forgiveness to assist 1500 lenders, which has amounted to 2 million loans being service by the spa on behalf of lenders and borrowers to assist without forgiveness. That particular program is also coinciding with the Restaurant Revitalization Program. I do want to thank the chairmans leadership on the restaurant program, we work to rule that out. With members of this Committee Staff as well as the house, 100 and thousand businesses were supported. The last thing that i will add before we get to the questions, which im looking forward to hopefully helping folks understand what we are trying to accomplish. It is to provide some context to the breadth of what the sba was asked to do. They estimated that in 2021, the total for Small Business and Medium Sized Enterprises was receiving capital from any source, any private source was under 650 billion dollars. In the covid idle program, in 2021 we put out 200 billion on top of the hundred and 67 million in 2020. It is absolutely the case that the spa has played a large role as the administered has work of this committee. Thank you. Again, thank you. I agree with that last statement that the spa has played a large role, theres no question about it. Its definitely in the pandemic and i agree with you and Civil Servants. I give a real thanks to the incredible amount of work that they have been doing to get help quickly, both with the ppp program, the idol advance program, and later with the restaurant program. It was incredible, it saved Small Businesses. That they exist today but would not have for the ability to get themselves out. As you pointed out, the bills were developed by him. This hearing, in regards to how many idle programs have been wound down, there is interest to see done right. I want to get the numbers right because we have 2. 9 million loans that were given out that we think 41,000 people who are looking for determinations that have not yet been done. We have seen at times the spa say that these are unworkable. To our knowledge, those 41,000 Small Businesses have not been informed as to their stats. They are sitting out there, hoping that theyre going to get a positive response. But they want a response. They want to move on with their life. They want to know whether they can or cannot access the funds. They have to play with their businesses. We believe there is 41,000 that are in that status. We have 125,000 Small Businesses that thought they were going to get their funds. Thought they had been approved for the trans, they havent gone there funds. Then they get notice is that there is no funds available. But yet, weve been told that there is money there. The funds are there, so it seems like they are not getting accurate information, which is extremely frustrating. They call our office, they call your office, they call every senator in this country with legitimate concern. Can you clarify the numbers for us . How many applications are still pending . Are they workable or not workable . Why havent these Small Businesses been notified . Are their applications that have been approved but have not been acted upon . And for what reason would that be . Yes, i will get you all of that. First, i want to start off by talking about hundred 25, 000, we can address that. The 125, 000, folks have obligated funds to again. They can close them today with the assistance of a spa District Office, directly themselves with the call center for the specific covid idle program. That money is there, we will not cancel those funds. Obviously at some point, later this year, we will send out notice and start to see if folks want to seek this. Obviously, it is one pro