AmiSight 12/22: My Statement About the EIDL Program
As I have previously written about, the SBA is currently issuing EIDL loans up to $2M with no proof of economic injury. This decision completely contradicts the program's intention and hurts businesses that were severely impacted by Covid-19 and continue to struggle with the dominoes of the Pandemic.
A few weeks ago, I met an entrepreneur who bragged to me that he was having his best year in his company's history and just had $2M wired into his account by the SBA. Despite the program restrictions, he has all types of outrageous plans about what he intends to do with the money and is comfortable taking the risk because the audit risks are so low.
In contrast, I know of a Vietnam Vet whose business was decimated by the Pandemic. He and most of his team have not been paid for a year, as they have struggled to survive and keep their 100-year-old company. He applied for the SBA EIDL increase ½ an hour after the program went live and has been stuck in the quicksand of the bureaucracy ever since.
Yesterday, he was declined because his credit score was too low. His credit has dropped dramatically since he applied, as he has struggled to keep his business alive.
The SBA should immediately create a threshold for economic damage and use the remaining available funds for businesses that need the money instead of those who are gaming the system.