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Where is The Coronavirus Stimulus Money? – Small Business Owners Keep Asking

The $2.2 Trillion CARES Act includes a provision for small businesses to receive up to $2 million in an Economic Injury Disaster Loan (EIDL) from the Small Business Administration (SBA).

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The EIDL program is an expansion of an existing SBA loan program the agency offers during other types of disasters such as hurricanes and earthquakes.

Congress gave the program a boost in the CARES Act with a promised forgivable emergency advance of $10,000 in funding within three days.

It seems lawmakers expected a rush on EIDL loans and realized it would take the SBA time to process that many loans quickly. This advance was supposed to help small businesses bridge the waiting period until their EIDL loan application was processed.

While another SBA loan program, the Paycheck Protection Program (PPP), made the headlines last week, the Washington Post reported that over three million small businesses applied for the EIDL program as their need was greater than just covering paychecks.

EIDL Loans Being Capped at $15K – No $10K Advances

Big promises made in the CARES Act appear to be turning into financial nightmares for small business owners.

The New York Times reported small business owners told them the SBA had capped EIDL loans at $15,000 now. The Times said this information “was backed up by a message from the agency that one applicant shared.”

Furthermore, over 400 business applicants told the Times they also did not receive the $10,000 EIDL Advance promised by the CARES Act.

The CARES Act provided $10 billion in federal funding to cover the $10,000 advances for about one million businesses. Given the Washington Post article, the funding is only sufficient to cover about 1/3 of the number of applicants the EIDL program received.

To add insult to injury, the Times further reported some EIDL loans might be initially approved at a higher amount, but later the number is being reduced.

The Times recounts the story of small business owner Deb Wood-Schade who was told on the phone she had been approved for nearly $25,000, but the actual loan documents she received days cut the loan to $8,300.

Washington Needs to Help

It is becoming evident that the funding and small business support programs in the CARES Act are not enough to help small businesses survive the coronavirus (COVID-19) emergency.

On Tuesday, everyone in Washington seemed ready to fund the Paycheck Protection Program with another $250 billion, but Thursday, that bipartisanship fell apart and Congress will take up negotiations again after Easter.

Technical problems, confusing rules about the lending process, banks not being ready, some banks not having the capital to service loans, all of these issues were being addressed in what appeared to be record time by the Washington bureaucracy.

Wells Fargo, one of the nation’s largest banks operating under an Asset Cap restriction imposed by regulators in 2018, was given temporary permission to exceed that cap.

It is doubtful anyone believed this process would be smooth.

But there appeared to be a genuine desire to help small businesses as they were being hammered hard by the social distancing lockdowns imposed nationally because of the coronavirus (COVID-19) emergency.

While any financial help is better than none, the SBA programs all appear to be running out of money to help small businesses survive these challenging times.

The Time is Now For More Federal Help

Congress and the administration will have to step up next week and provide more money to help small businesses.

With the coronavirus (COVID-19) emergency not going away in weeks, but months, small businesses cannot survive the long-haul on token amount loans.

For all practical purposes, Washington will have to fund small business owners who are trying to keep as many people employed as possible.

If not, federal monies will be needed to boost state unemployment agencies and other social safety net programs as more small businesses close their doors.

It’s not a matter if taxpayer money needs to be spent. It is a matter of when, how, and where the money will be spent.

And to get this done, bipartisan support is a necessity, not an option.


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