Harder Pushes Administration to Ensure Underserved Small Businesses Are No Longer Left Behind

WASHINGTON – Yesterday, Representative Josh Harder sent a letter to Small Business Administrator (SBA) Isabel Guzman calling out the agency for failing to track demographic data for the recipients of the $357 billion COVID relief dollars dispersed by the SBA. By failing to track this data, Harder's letter states, the program neglected underserved business owners across the Central Valley.

Minority small business owners faced a significantly high closure rate at the onset of the pandemic with 41 percent of Black-owned businesses, 32 percent of Latino- owned businesses and 20 percent of Asian-owned businesses forced to close their doors as a result of COVID-19. Recent reports indicate that minority small business owners have had difficulty accessing COVID relief dollars since the beginning of the pandemic.

"Our Valley has been left behind for generations, and it's beyond frustrating to see that pattern continue when it comes to our small businesses getting this critical batch of funding," said Rep. Harder. "Today, I'm calling on the Small Business Administration to shape up and do what's necessary to support the underserved businesses in our community."

This work is a continuation of Rep. Harder's years long commitment to ensuring federal COVID-19 funds are used efficiently and effectively. Last June, Harder called out the administration for processing just 3% of applications from bars, movie theaters, museums and concert halls applying for federal aid.

Read the letter below and online here:

Dear Administrator Guzman,

I write today to urge the Small Business Administration (SBA) to track demographic data for the COVID-19 Economic Injury Disaster Loan (EIDL).

Based on SBA reporting, nearly $357 billion COVID EIDL dollars were distributed during the pandemic, yet there is not a clear picture of which populations received the most assistance. The SBA is unable to confirm if these COVID relief funds were accessed by small businesses who have been historically underserved and unable to obtain capital from traditional banking institutions. By not tracking this data, we continue to neglect disadvantaged business owners.

Small businesses were disproportionately hit by the pandemic; many struggled to survive. In an effort to provide support to these businesses, the federal government appropriated an additional $153 billion dollars in COVID relief funds to the SBA. These dollars were intended to help small businesses stay afloat during the COVID-19 emergency. However, reports indicate that minority small business owners had difficulty accessing COVID relief dollars since the beginning of the pandemic.

Minority small business owners faced a significantly high closure rate at the onset of the pandemic with 41 percent of Black-owned businesses, 32 percent of Latino- owned businesses and 20 percent of Asian-owned businesses forced to close their doors as a result of COVID-19. The Federal Reserve Bank reported that minority and women-owned businesses were twice as likely as non-minority businesses to be classified as at-risk or distressed. Without accurate and comprehensive data, there is no way to determine if minority small business owners have been able to access the federal relief dollars they desperately need.

Traditional SBA lending programs such as the 7(a) and the 504 program have clear demographic data of its borrowers. Why weren't these same practices applied to the COVID EIDL? The federal government spent billions of dollars on these programs, yet without data, there is no way to ensure that our most vulnerable populations – those we intended to serve with these dollars – are not left behind. Collecting demographic data will enable the SBA to make necessary changes to antiquated systems that continue to fail disadvantaged businesses.

Thank you for your attention to this critical matter and I look forward to your timely response.

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