Senate Committee on Small Business and Entrepreneurship Ranking Member Ben Cardin (D-Md.), Senate Democratic Leader Chuck Schumer (D-N.Y.), and Senate Committee on Banking, Housing, and Urban Affairs Ranking Member Sherrod Brown (D-Ohio) yesterday sent a letter to U.S. Small Business Administration (SBA) Inspector General Mike Ware, calling for the immediate investigation of reports that some lenders participating in the SBA’s Paycheck Protection Program have prioritized the applications of their larger and wealthier clients to the detriment of smaller businesses adversely impacted by the coronavirus pandemic.
According to these reports, some private and commercial banking customers received special treatment from their banks when applying for assistance through the Paycheck Protection Program, while smaller businesses, including those at greater risk because of the pandemic, have struggled to receive timely assistance from their banks, contrary to the SBA’s “first-come, first-served” claims.
The senators emphasize that the hardest-hit and underserved small businesses—including rural small businesses, minority-owned small businesses, and women-owned businesses—must receive assistance as quickly as possible from any eligible lender, and that the lack of a prior relationship with a bank should not stand in the way of lending to these eligible small businesses.
Senators Cardin, Schumer, and Brown, call on the SBA IG to review the implementation of the Paycheck Protection Program by SBA-eligible lenders, and to also provide recommendations on SBA’s current rules, regulations, policies, and procedures to ensure small businesses get the money they need and are treated fairly by any bank lender participating in the Paycheck Protection Program by May 8, 2020.
Senators Cardin, Schumer and Brown’s letter to SBA Inspector General Ware can be found at www.sbc.senate.gov/public/_cache/files/3/5/35ed6b8a-98b6-48bb-b981-bec36093d414/032BC243A62968CAB16F7E1EDE36900D.200424cardinschumerbrownlettertosbaigware.pdf.