[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]




 
                   THE ECONOMIC INJURY DISASTER LOAN
                    PROGRAM: STATUS UPDATE FROM THE 
                             ADMINISTRATION

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                              JULY 1, 2020

                               __________

 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                 
 
 
 
                               

            Small Business Committee Document Number 116-084
             Available via the GPO Website: www.govinfo.gov
             
             
                           ______

             U.S. GOVERNMENT PUBLISHING OFFICE 
41-295                 WASHINGTON : 2021 
             
             
             
             
             
                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                         ABBY FINKENAUER, Iowa
                          JARED GOLDEN, Maine
                          ANDY KIM, New Jersey
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                         KWEISI MFUME, Maryland
                          JUDY CHU, California
                       DWIGHT EVANS, Pennsylvania
                        BRAD SCHNEIDER, Illinois
                      ADRIANO ESPAILLAT, New York
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                         ANGIE CRAIG, Minnesota
                   STEVE CHABOT, Ohio, Ranking Member
   AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                          TROY BALDERSON, Ohio
                          KEVIN HERN, Oklahoma
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        TIM BURCHETT, Tennessee
                          ROSS SPANO, Florida
                        JOHN JOYCE, Pennsylvania
                       DAN BISHOP, North Carolina

                 Melissa Jung, Majority Staff Director
   Justin Pelletier, Majority Deputy Staff Director and Chief Counsel
                   Kevin Fitzpatrick, Staff Director
                   
                            C O N T E N T S

                           OPENING STATEMENTS

Hon. Nydia Velazquez.............................................     1
Hon. Steve Chabot................................................     4

                                WITNESS

Mr. James Rivera, Associate Administrator, Office of Disaster 
  Assistance, Small Business Administration, Washington, DC......     5

                                APPENDIX

Prepared Statement:
    Mr. James Rivera, Associate Administrator, Office of Disaster 
      Assistance, Small Business Administration, Washington, DC..    38
Questions and Answers for the Record:
    Questions from Hon. Dwight Evans to Mr. James Rivera and 
      Answers from Mr. James Rivera..............................    42
Additional Material for the Record:
    None.


   THE ECONOMIC INJURY DISASTER LOAN PROGRAM: STATUS UPDATE FROM THE 
                             ADMINISTRATION

                              ----------                              


                        WEDNESDAY, JULY 1, 2020

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:05 a.m., in Room 
2118, Rayburn House Office Building, Hon. Nydia M. Velazquez 
[chairwoman of the Committee] presiding.
    Present: Representatives Velazquez, Finkenauer, Kim, 
Davids, Chu, Evans, Schneider, Delgado, Houlahan, Craig, 
Chabot, Radewagen, Balderson, Hern, Hagedorn, Stauber, 
Burchett, Spano, Joyce, and Bishop.
    Chairwoman VELAZQUEZ. Good morning. I call this hearing to 
order.
    Without objection, the Chair is authorized to declare a 
recess at any time.
    I want to thank everyone, especially our witness, for 
joining us today for our Committee's hybrid hearing.
    I want to make sure to note some important requirements. 
Let me begin by saying that standing House and Committee rules 
and practice will continue to apply during hybrid proceedings. 
All members are reminded that they are expected to adhere to 
these standing rules, including decorum.
    With that said, the technology we are utilizing today 
requires us to make some small modifications to ensure that the 
members can fully participate in these proceedings. During the 
covered period, as designated by the Speaker, the Committee 
will operate in accordance with House Resolution 965 and the 
subsequent guidance from the Rules Committee in a manner that 
respects the rights of all members to participate.
    House regulations require members to be visible through a 
video connection throughout the proceedings, so please keep 
your cameras on. Also, if you have to participate in another 
proceeding, please exit this one and log back in later.
    In the event a member encounters technical issues that 
prevent them from being recognized for their questioning, I 
will move to the next available member of the same party and 
will recognize that member at the next appropriate time slot, 
provided they have returned to the proceeding.
    Should a member's time be interrupted by technical issues, 
I will recognize that member at the next appropriate spot for 
the remainder of their time once their issues have been 
resolved.
    In the event a witness loses connectivity during testimony 
or questioning, I will preserve their time as staff addresses 
the technical issues. I may need to recess the proceedings to 
provide time for the witness to reconnect.
    And, finally, remember to remain muted until you are 
recognized to minimize background noise. In accordance with the 
rules established under House Resolution 965, staff have been 
advised to mute participants only in the event there is 
inadvertent background noise. Should a member wish to be 
recognized, they must unmute themselves and seek recognition at 
the appropriate time.
    For those members here in the room today, we will also be 
following the health and safety guidelines issued by the 
Attending Physician. That includes social distancing and 
especially the use of masks. I urge members and staff to wear 
masks at all times while in the hearing room, and I thank you 
in advance for your commitment to a safe environment for all 
here today.
    Last night, on the eve of the date the Paycheck Protection 
Program expires, the Senate passed a bill to extend the program 
to August 8.
    From the inception of the program, I have clearly stated 
that, until we know where the money is going and how our very 
small businesses, which includes independent contractors and 
sole proprietors and minority- and woman-owned firms, are 
faring, we cannot blindly extend the program. With that said, 
Congress still does not have the data it was promised, nor does 
the public have any information.
    In May, the Congress passed the HEROES Act, which extended 
the program through the end of the year and set aside funds for 
small businesses with fewer than 10 employees and leveraging 
our mission-based lenders, like CDFIs, MDIs, and microlenders.
    Moreover, this important bill included provisions to 
require the administration to provide regular disclosure to 
Congress and the public. Yesterday, Secretary Mnuchin stated he 
was working with the Senate on the next steps for PPP and spoke 
of secondary loans.
    As I have said all along, I invite the Senate and the 
administration to sit down with us to discuss extending PPP 
loan authority and the many improvements put forth by members 
of this committee.
    We are meeting today to conduct an important hearing on SBA 
implementation of the Economic Injury Disaster Loan Program or, 
as some call it, the EIDL Program, which was activated on March 
12, making it the first economic relief program to assist small 
businesses adversely impacted by the coronavirus pandemic.
    I would like to thank Mr. James Rivera, the Associate 
Administrator for SBA's Office of Disaster Assistance, for 
being here today to discuss many of the issues surrounding the 
implementation of the EIDL Program.
    Mr. Rivera, I value your commitment and the hard work of 
your staff, and I fully understand the extraordinary efforts 
put forth to respond to this unprecedented crisis. However, we 
are holding this hearing today because of some very concerning 
issues that have hindered relief for thousands of small 
businesses.
    As you know, we held a hearing last month in which we heard 
directly from the EIDL applicants about their experiences with 
the program. One small-business owner discussed the negative 
impact of SBA unilateral reduction of the maximum loan size 
from $2 million to $150,000, a cut of more than 90 percent.
    He, like thousands of small-business owners across the 
country, was drawn to the EIDL Program largely due to the 
ability to use an EIDL loan for more than just payroll. Imagine 
being in the position of thinking this program, at a max of $2 
million, is just what your business needs, only to learn at 
loan approval that SBA had drastically reduced the loan amount.
    This is precisely the kind of information that needs to be 
conveyed to borrowers ahead of time. It makes it a 
fundamentally different loan product. And for those who needed 
an amount greater than $150,000, EIDL was rendered irrelevant.
    Throughout the process, SBA showed a lack of understanding 
of the challenges facing small businesses related to COVID-19, 
especially by offering a one-size-fits-all $150,000 loan 
without offering them an opportunity to apply for a second loan 
or seek additional funding. Small businesses looking to the SBA 
for help were essentially told, ``Take it or leave it,'' 
regardless of need or size, and then told to have a nice day.
    We also heard from a community pharmacist in south 
Philadelphia who applied for the EIDL loan but was denied due 
to unsatisfactory credit history. This is a lifelong 
entrepreneur who has struggled with resisting margins and is 
now saddled with additional burdens due to COVID-19.
    Borrowers like the community pharmacist who have been 
denied for allegedly unsatisfactory credit history have 
reported that the credit threshold for approving a loan is not 
clear and borrowers do not know what the limit is, leaving them 
feeling like the decision was arbitrary. I am sure it would be 
helpful to all if SBA simply communicates the credit minimums 
to small businesses up front.
    I have also heard from small businesses who were denied 
because of unverifiable information, meaning there were items 
that were reviewed that caused SBA to question the validity of 
the items. But the denial letter never detailed the information 
that was missing, leaving applicants with little insight as to 
why they were denied.
    Though these decisions can be appealed, that only adds to 
the delays and expenses of a struggling business owner. These 
businesses need relief, and they need it now.
    Even more troubling is the fact that the SBA has not 
communicated well with applicants, nor has it provided them 
with reliable ways to check the status of their applications. 
Borrowers are simply told that the loan is processing. The only 
other updates they receive are whether the loan has been 
approved or denied.
    Applicants need to know where they stand in the queue so 
they know how much longer they must wait before receiving 
financing. And given the current economic climate, if they are 
going to be denied, they deserve to know quickly so that they 
can explore options for capital elsewhere.
    Finally, there was a long period during which the EIDL 
application portal was limited to only agricultural small 
businesses, which is completely at odds with the intent of the 
Small Business Act and the mission of the SBA, which is to aid, 
counsel, assist, and protect the interests of all small 
businesses.
    It is particularly troubling to have heard allegations that 
these loans were being processed before other applications that 
were already in the queue. And we hope to get a clear answer on 
that today.
    At the Committee continues its oversight duties, I am 
looking forward to hearing from Mr. Rivera about how many 
applications are currently pending in the queue, how much more 
funding is necessary to meet the loan demand, and what steps 
SBA is planning to take to ensure small businesses across the 
country receive the economic relief they need to survive.
    Already, a number of large companies have declared 
bankruptcy post-COVID-19, and experts say it is not long before 
this wave of bankruptcies hits small businesses. We need to be 
doing more to help avert this outcome.
    With that, I look forward to hearing from Mr. Rivera on the 
EIDL's performance in response to COVID-19 and what ODA needs 
from Congress to fully implement the EIDL Program consistent 
with our intent.
    I now yield to the Ranking Member, Mr. Chabot, for the 
opening statement.
    Thank you.
    Mr. CHABOT. Thank you, Madam Chairman. And thank you for 
holding this meeting on the Small Business Administration's 
Economic Injury Disaster Loan Program, popularly known as the 
EIDL Program.
    At the beginning of the year, the Nation's economy and the 
country's small businesses were reaching new heights. We were 
experiencing historic levels of unemployment, and momentum was 
building. For example, unemployment among African Americans, 
Asian Americans, Hispanic Americans was at all-time lows, 
meaning that more and more people were working. That was a good 
thing.
    Unfortunately, COVID-19 made its way to our shores. As a 
result, a huge number of America's small businesses, coast to 
coast, were forced to close their doors and turn off their 
lights. With demand for goods and services limited by this 
emergency, small businesses shifted to survival mode.
    It was clear from the beginning that the Nation's smallest 
firms would need immediate access to capital to weather the 
storm. The SBA was handed a task that was unequaled in our 
history.
    Congress, in a bipartisan fashion, and the Federal agency 
that represents, assists, and fights for America's smallest 
firms responded by setting up the Paycheck Protection Program, 
which works in partnership with private lenders to deliver 
funds to small businesses. This program has delivered 4.8 
million loans, in the amount of nearly half-a---actually, over 
half-a-trillion dollars now.
    The SBA also continued to administer the Economic Injury 
Disaster Loan Program, EIDL, which had its roots as a post-
event recovery program for businesses and communities that were 
hit by a natural disaster.
    Both of these programs, from the beginning of this crisis, 
experienced overwhelming, unprecedented demand. EIDL shifted 
immediately from being a regional program--a natural disaster 
typically strikes a particular locale--to a full-fledged 
national relief program.
    Thus far, the program has delivered just over 2 million 
loans, for $127 billion. In my home State of Ohio, for example, 
the program has delivered 45,000 loans, for $2.6 billion, to 
date.
    I would like to thank the SBA for being a vital resource to 
the Nation's small businesses, entrepreneurs, and startups. 
However, we are a number of months into this crisis now, and 
the SBA's EIDL Program has a lot of room for improvement.
    While EIDL loans are being processed and the Advance grants 
are being disbursed, too many small businesses are left with 
questions--questions on communication, questions on the status 
of their loan, and questions surrounding the maximum loan 
amount under the program.
    When small-business owners are left with limited 
information, common, everyday business decisions become 
difficult. We must strive to provide small businesses with as 
much information as possible, especially during these uncertain 
times.
    I look forward to getting to the bottom of many of these 
questions and determining how we can work together to provide 
solutions for our Nation's smallest firms.
    I want to thank the SBA's Associate Administrator for the 
Office of Disaster Assistance, Mr. James Rivera, for joining us 
today. I look forward to his testimony and also, obviously, 
answering questions from members on both sides of the aisle.
    As was the case prior to the COVID-19 outbreak, I know that 
small businesses will once again be our Nation's guiding light.
    And, with that, Madam Chairwoman, I yield back.
    Chairwoman VELAZQUEZ. Thank you, Mr. Chabot.
    I would like to thank a moment to explain how this hearing 
will proceed. Each witness will have 5 minutes to provide a 
statement, and each Committee member will have 5 minutes for 
questions. Please ensure that your mike is on when you begin 
speaking and that you return to mute when finished.
    With that, I would like to introduce Mr. James Rivera, the 
Associate Administrator for SBA's Office of Disaster 
Assistance. In this capacity, Mr. Rivera directs the SBA 
Disaster Loan Program, including EIDL.
    He began his SBA career in Texas in 1989, serving as a 
disaster loan specialist. Over his 30-year SBA career, he has 
also served as the Associate Administrator for the Office of 
Financial Assistance. And prior to his public service, Mr. 
Rivera was a commercial loan officer in the private sector.
    We welcome you back to the Committee, and you are 
recognized for 5 minutes.

 STATEMENT OF JAMES RIVERA, ASSOCIATE ADMINISTRATOR, OFFICE OF 
DISASTER ASSISTANCE, SMALL BUSINESS ADMINISTRATION, WASHINGTON, 
                              D.C.

    Mr. RIVERA. Good morning, Chairwoman Velazquez, Ranking 
Member Chabot, and members of the Committee. Thank you for the 
opportunity to update you on the agency's Economic Injury 
Disaster Loan Program and our response to the coronavirus 
pandemic.
    In March, SBA worked with all States and territories to 
facilitate approval of 56 disaster declarations for small 
businesses affected by the pandemic. At that time, 
Administrator Carranza made an important administrative change 
to ease the business impact certification. This enabled the SBA 
to provide disaster loans for small businesses in all 50 States 
and 6 U.S. territories, and it established a nationwide 
disaster assistance program.
    As a result, the loan numbers and dollars we are 
experiencing are unprecedented so far. This agency has provided 
economic relief to over 6.8 million small businesses, for over 
$147 billion. This more than doubles the amount of disaster aid 
provided in the entire 67-year history of the agency.
    To help achieve that, SBA created and implemented an 
entirely new online portal application and distribution system 
for EIDL loans and grants. This system has now handled over 8 
million applications and has allowed us to distribute dollars 
to those small businesses in record time. Currently, we are 
processing grants in less than 2 days.
    The pandemic and nationwide program has also required the 
agency to scale up our disaster staff, now totaling over 7,000 
personnel.
    Meanwhile, our program office continues to service 175 
other major and agency disaster declarations, which total a 
billion dollars in natural disasters this year, including the 
two recent requests from Governors for small businesses 
assisted in areas of civil unrest.
    These successes, unparalleled and historic for the agency, 
have not been without their challenges, however. Let me mention 
a few.
    First, between mid-March and the end of April, the agency 
had to stop processing applications three times. This was due 
to the program changes made through CARES Act legislation, the 
lack of funds, and the need to stand up an entirely new system 
to administer the grants. During this time, the agency received 
close to 4 million applications in a 2-week period. This did 
set us back, and we have now been working hard to catch up 
since.
    In moving quickly to build the new system, we unfortunately 
were not able to provide the same internal visibility as exists 
with our disaster loan application portal. This, combined with 
the application volume mentioned above, resulted in uncertainty 
for many.
    Following the exhaustion of funds and in receiving 
additional funding, the agency looked at how best to maximize 
these dollars for pending applications, newly eligible 
agricultural enterprise businesses, and future applicants. In 
reopening the portal 2 weeks ago, we also needed to keep in 
mind that the disaster application period, as defined in the 56 
declarations, runs through mid-December.
    With regards to the EIDL grants or advances, the agency 
also looked at how best to maximize those funds. We consulted 
bill authors, and, through a per-employee allocation, we now 
have been able to reach 2.2 million more businesses with 
financial aid.
    I mentioned the significant growth in our staffing, but 
that comes with the need of education and training. We continue 
to adjust every week to the demands in our call center and in 
our loan processing centers.
    In highlighting our successes and reflecting on our 
challenges, it is also important to evaluate where we are 
today. We have been continuously processing loans for 2 months. 
All applications have now been initially decisioned. All 
advances have been distributed.
    Our processing times, due to volume and stoppages, averaged 
around 41 days. Since we reopened the portal, our processing 
times for new applications are now 5 days. We are much stronger 
and at a stable operational staff level today, and small 
businesses are getting the needed dollars disbursed to them in 
record times.
    At SBA, our mission is one of service. We have a proud 
history of helping small-business owners in their time of need. 
Every disaster event is unique, and there are always lessons 
learned. While facing a disaster situation unlike any in our 
agency's history, we have had to do this while operating in a 
telework and virtual environment ourselves. We have also been 
affected by the pandemic, having lost one of our dedicated 
staff members to the virus.
    In the end, I know we share a common goal: to provide 
economic relief to American small businesses. We will continue 
to do our very best, and we will continue to work closely with 
you to achieve that goal.
    Thank you.
    Chairwoman VELAZQUEZ. Thank you, Mr. Rivera.
    I now recognize myself for 5 minutes.
    Mr. Rivera, SBA received approximately $2.7 billion in 
funding for salaries and expenses to fulfill your mission to 
deliver the PPP, EIDL, and other agency programs to struggling 
small businesses.
    What portion was allocated to the Office of Disaster 
Assistance? How much has been spent? And what have been the 
biggest cost drivers?
    Mr. RIVERA. Thank you, Madam.
    We received two sets of funds. We used $7 billion initially 
in our existing disaster funds that was carried over from 
Harvey, Irma, Maria on the loan side. On the administrative 
side, Congress was generous enough to give us $470 million, and 
we are close to spending through that right now. The $2.1 
billion we have planned out over the next--I think it sunsets 
in September of 2021. So, we are working through those funds 
right now.
    Major costs, to answer your question, we have 7,000 
employees; we have close to 2,000 contractors. We are running a 
24/7 operation at the call center. So a lot of these expenses 
that we have not had in a natural disaster have grown 
exponentially with this effort.
    Chairwoman VELAZQUEZ. Okay. So you hired more staff. You 
hired contractors to help you perform the duties of the office 
in providing assistance to small businesses.
    And so that is one of the first issues that I raised, and I 
was the one fighting here to get that money to you. Because I 
have been on this committee for 28 years, and I know every time 
that there is a natural disaster how bad the agency has failed. 
Because the budget has consequences, right? And every time that 
the budget is cut, manpower is going to be reduced. And here we 
are.
    Of course, we provided the money to hire more staff and to 
hire contractors, bring in contractors, but then there is the 
training and so on. So those are issues that we need to keep in 
mind, because climate change is not going away, and we are 
going to be in this position many, many times more.
    Mr. Rivera, I have heard countless complaints about SBA's 
poor customer service. Applicants spent hours on hold, only to 
be told their applications were pending and to check back again 
next week.
    Why was SBA's system unable to provide more detailed 
information regarding the flow of the application through the 
approval process?
    Mr. RIVERA. Let me, if I can, take you back to mid-
December. We have this system internally that we use to respond 
to--natural disasters; it is the Disaster Credit Management 
System 2.0. We used that for the first 2 to 3 weeks.
    When we received the opportunity to do a grant program--
which we have never had a grant program on the disaster loan 
side--we pivoted to an existing contract that we received post-
Harvey, Irma, Maria. It was a surge contract that enabled us to 
rebuild it.
    And, looking back, we should have had visibility, no doubt 
about it, similar to the way we have with the disaster loan 
application portal. What happened is, in our angst to get this 
service out and get to this new portal, we did not have 
visibility in the application portal.
    Once an applicant gets invited into the loan queue or to 
the grant queue, there is visibility. But, in hindsight, we 
should have added that additional visibility that we didn't 
have.
    Chairwoman VELAZQUEZ. At the Senate hearing a few weeks 
ago, Administrator Carranza said that the SBA was working to 
add more visibility to the automated system. When will that be 
completed?
    Mr. RIVERA. So, we don't have any loans in the application 
queue anymore. Everything has been processed. Since we have 
reopened the portal, we have received close to an additional 2 
million loan applications. Everything is in the loan queue, so 
there is visibility from that perspective, and all grants have 
been processed.
    Chairwoman VELAZQUEZ. So why, then, did she say that the 
Administration was planning to add more visibility?
    Mr. RIVERA. I think if you go back to the June 15 date, 
that is just the amount of applications we had in the queue. I 
think it was a timing issue.
    Chairwoman VELAZQUEZ. Okay. Thank you.
    So, Mr. Rivera, we understand that SBA limited the size of 
the EIDL loan to $150,000. What percentage of applicants had 
requested and, based on the EIDL calculation, should have 
received more than $150,000?
    Mr. RIVERA. So, currently 80 percent of the applications 
are below $150,000. The average loan is $61,000 overall. We 
have 19 percent of the applications that are at that $150,000 
threshold.
    Chairwoman VELAZQUEZ. Okay. So can you answer my question, 
just the percentage of people that applied for $2 million 
that----
    Mr. RIVERA. Right.
    Chairwoman VELAZQUEZ.--didn't receive it and just got 
$150,000?
    Mr. RIVERA. So, Madam, I don't have that information 
because we----
    Chairwoman VELAZQUEZ. Can you please forward that 
information to us?
    Mr. RIVERA. Sure. But we determine economic injury. You can 
request whatever you want, but it is based on 6 months of 
working capital.
    And I think we could have done a better job of 
communicating that it is based on 6 months of working capital. 
It is not based on whatever loan amount that you are 
requesting. It is different than a traditional bank loan, from 
that perspective.
    Chairwoman VELAZQUEZ. Okay.
    My time has expired, and I now recognize the Ranking 
Member.
    Mr. CHABOT. Thank you, Madam Chair.
    Mr. Rivera, I have heard from many small businesses and 
numerous Members of Congress about the lack of communication 
coming from the SBA, with regard to the EIDL Program 
specifically.
    How can we work together to ensure that small businesses 
receive the most up-to-date information on EIDL assistance? And 
are there any programmatic changes that we need to consider?
    Mr. RIVERA. The last, gosh, 3 months have been a tough 
road, obviously. This is a national footprint; it is not a 
regional disaster, from that perspective.
    We have learned a lot from a communication perspective. And 
to answer your question, we need to do a better job of getting 
what the program guidelines are out there and being able for 
all small businesses to understand.
    We thought we were communicating pretty well from the 
perspective of when we talked to each individual business 
owner; they knew exactly what we were trying to do and what we 
were trying to address their needs. But there is always room 
for improvement, and we are willing to work with Congress, 
however you see fit.
    Mr. CHABOT. We definitely would want to work with you on 
that, and I think both sides. You know, this is a very 
bipartisan committee, and I think we can work together with you 
to improve this.
    As we consider ways to improve the Federal response to this 
emergency and emergencies in the future, do you believe that 
private lenders could have a role within the Disaster Loan 
Program?
    Mr. RIVERA. Let me state what we are actually doing.
    We had the surge contract. We have actually used the surge 
contract--I will hold back the name of the company. I can tell 
you offline if you want. But, basically, this company is doing 
what private lenders are doing.
    When we moved to this portal, they are processing the loan 
for us. Under the traditional EIDL, the goal is two loans per 
day. Under this contract that we are using, where we have this 
business doing--this bank-type business doing an algorithm, we 
can do 25 loans a day.
    So, we are using the private sector, in a private-public 
partnership relationship, to process these loans. We could not 
have processed these loans on our existing platform. That is 
why we stopped for 2 weeks. We went and we built this portal 
with this company, with this institution, and that is what has 
enabled us to do that.
    Definitely, moving forward, this is the path forward. It 
has increased the cycle times. It has increased the 
productivity. It has helped us provide quicker, faster service, 
from that perspective.
    Mr. CHABOT. That is good to hear. Because, obviously, 
injecting some of the private sector and competition into the 
government--which tends not to be, no offense or anything, a 
little less efficient, because, you know, we don't compete with 
others. They do. And we learned that in the PPP program. You 
know, we had the private sector out there make the loans, and I 
think that sped up the process tremendously.
    My next question: We know more about this emergency today 
than we did in March. We are also starting to see some 
businesses return under modified operations. Congress is 
currently debating the Federal Government's next steps as it 
pertains to this emergency.
    As we continue to have these discussions, where should we 
concentrate our efforts within the EIDL Program? Where should 
we make adjustments to ensure the program assists current 
small-business applicants? And how can we structure the program 
to be flexible and nimble when the next disaster strikes?
    Mr. RIVERA. Well, I have to thank the Committee and 
Congress from the perspective of what you enable us to do. You 
eliminated some statutory requirements. The ``credit 
elsewhere'' test is not required. We didn't have to get Federal 
tax returns. So we went truly with just a credit score, from 
that perspective. You have been very helpful through this 
process.
    As we continue to take a daily look at the amount of volume 
that we have--we have 8 million applications--in relation to 
what we process, we will continue to have that discussion, as 
far as other opportunities that we may have.
    Mr. CHABOT. Okay.
    How are you and how should we measure the effectiveness of 
the EIDL Program?
    Mr. RIVERA. Effectiveness. I wish I could approve every 
loan. I really do. We must have a credit standard. We are a 
loan standard. I mean, our current approval rate is 51 percent.
    One of the things that has been different with this new 
portal is we have a DocuSign-type document where we are able to 
immediately disburse within the next day. Generally, under the 
traditional process, it takes us 2 to 3 weeks because we are 
flipping paper back and forth between us and the small 
business, where, now, we are 99 percent disbursed.
    So, of the $131.9 billion that we have approved, we have 
already disbursed $130 billion to the small businesses. That is 
money in their bank. I mean, it is a day turnaround time, from 
that perspective.
    So, it has been a positive experience. That is one of the 
real lessons learned that we have used from a technology 
perspective, using the algorithms, using those types of 
features.
    What we need to figure out is how can we better improve on 
these individuals, these small businesses that we decline. Many 
of them received grants, you know, the advance, but we are 
going to come out with a lessons-learned, and we will be sure 
to share that with you when this COVID period ends and we can 
move on and look back from that perspective.
    Thank you.
    Mr. CHABOT. Thank you.
    My time has expired, Madam Chair.
    Chairwoman VELAZQUEZ. Time has expired.
    And now the gentlelady from Kansas, Ms. Davids, is 
recognized.
    Ms. DAVIDS. Thank you, Chairwoman Velazquez and Ranking 
Member Chabot, for holding this hearing today.
    The Economic Injury Disaster Loan Program, or EIDL Program, 
is definitely meant to provide an immediate lifeline to small 
businesses who are struggling to stay afloat during the 
coronavirus pandemic. But I have heard from too many small 
businesses, small-business owners in my community that, you 
know, they are experiencing chronic delays, a lack of 
transparency in response to their applications.
    And I know we have kind of been talking about that this 
morning already, but, Mr. Rivera--first of all, thank you for 
joining us today.
    You know, as I have heard from my constituents and 
witnesses in this committee that the Chairwoman referenced 
earlier around their frustration, I am curious about, you know, 
whether or not you all are working to provide more step-by-step 
information for applicants and then, you know, whether or not 
you are going to be able to have more frequent and open 
communications going forward. Because, you know, you are 
talking about the technological and operational work that you 
are doing, and I am just curious what that is going to look 
like going forward.
    Mr. RIVERA. The current portal that we are using is 
exclusive to COVID. And what we have done is, we have 1 million 
to 2 million individuals that are in certain parts of the 
queue, so we continue to communicate. We have reached out five, 
six, seven times via email. We are calling these 1 million to 2 
million people through our call campaign. We are leaving 
messages.
    If I could fast-forward to today, we are a better operation 
than we were, you know, 90 days ago when we were standing up. 
Internally, we had to understand this new portal ourselves. So, 
in looking back, we should have probably had better 
communications, been a little bit more transparent when it 
comes to the 10 steps in the process.
    And that is kind of the tactical approach that we are doing 
right now. As I have mentioned, everybody is in the loan queue. 
We have processed all of the grants on the 8 million 
applications that we have received so far. And we are still 
receiving, you know, 200,000 to 300,000 applications a day 
since we reopened the portal back in mid-June.
    Ms. DAVIDS. Thank you.
    And then just really quickly, you know, the local SBA 
district office in the Kansas City metro area that serves the 
Kansas Third has done a great job of outreach and has been 
great at communicating with my office and our constituents.
    I am curious about, what kind of coordination is happening 
and communication with district offices and our entrepreneurial 
partners? And are there ways that we can better utilize those 
district offices for that function?
    Mr. RIVERA. That is one of the things Administrator 
Carranza reminds me daily of: no stovepipes, organizationally. 
We are very collaborative with field operations. We thank field 
operations. They have given us several hundred employees to 
help us process these loans.
    We have very clear communication. If there is a 
congressional, for example, that comes in from your district, 
we have a direct line of 20-plus disaster agents that can 
provide responses from that perspective. They do have other 
stuff other than COVID to do, but they spend all their time 
between PPP and EIDL, as far as communicating back and forth 
with us.
    Ms. DAVIDS. Thank you.
    And, you know, the last comment I will make is just, I have 
appreciated the Chairwoman's work on helping us increase the 
transparency around who has been receiving the various loans 
and grants.
    And, also, Mr. Rivera, I appreciate the work and your time 
today.
    With that, I will yield back.
    Chairwoman VELAZQUEZ. Thank you.
    And I am going to take the privilege of using 55 seconds to 
ask you a followup question of the question that she asked, Ms. 
Davids.
    And that is that, when we held a hearing here with SBDCs, 
all our partners, they mentioned that they learned of changes 
made by SBA on rules and guidance from the media. So you need 
to have better coordination with the partners that are in the 
field, helping them in providing the information--the most 
accurate information.
    Mr. RIVERA. Yes, ma'am. We agree.
    You know, Allen Gutierrez, the head of the Entrepreneurial 
Development, he is just right down the--5, 10 offices away from 
me.
    The challenge we have is, this was such a new process for 
us that, as we communicated internally, sometimes people got to 
the media before we had the opportunity to get to our resource 
partners. And we clearly understand that we have to do a better 
job communicating.
    Chairwoman VELAZQUEZ. Okay.
    So the gentlelady from American Samoa, Mrs. Radewagen, is 
recognized for 5 minutes.
    Mrs. RADEWAGEN. It is a beautiful morning here in Pago 
Pago, American Samoa, at 3:30 a.m. And I want to thank Mr. 
Rivera for being with us today.
    Mr. Rivera, can you explain the rationale for initially 
allowing only agricultural-related businesses access to the 
EIDL portal for weeks? That caused some confusion here in my 
home district.
    And what do you think Members of Congress should focus on 
within the EIDL Program as we debate the next steps?
    Mr. RIVERA. Regarding the agricultural applications, we 
process those concurrently. We set up a separate queue where we 
were continuing to process these loans that were in the queue, 
and then we set up a different track for the agricultural 
enterprises. So, they were being processed concurrently, you 
know, from that perspective.
    What could we do different? As I mentioned earlier, the 
ability to let us not have to do a ``credit elsewhere'' test, 
the ability for us not to have to get Federal tax transcripts, 
from that perspective, a lot of those improvements have just 
been phenomenal and have enabled us to have a more cookie-
cutter approach in order to get this assistance out as soon as 
possible.
    Mrs. RADEWAGEN. Do you believe there is room for private 
lenders to operate within SBA's Disaster Loan Program moving 
forward?
    Mr. RIVERA. So, you know, as I mentioned earlier, we are 
using a private-sector organization that has--we had a surge 
contract post-Harvey, Irma, Maria where that is their portal. 
So you go into the SBA website, you go up to their portal, they 
do the algorithm with all the data that they are completing, 
and then they bring it back to us for a team lead to do the 
decisioning.
    Had we not had that relationship and had we not had that 
contract, we wouldn't have been able to process 25 loans, on 
average, per loan officer per day. We would be probably at two 
to three loans per day, which is not--that is not acceptable.
    So, you know, we do take advantage of these opportunities 
with these private-sector organizations. We had this contract 
in place post-HIM.
    Mrs. RADEWAGEN. Thank you, Madam Chair. I yield back the 
balance of my time.
    Chairwoman VELAZQUEZ. The gentlelady yields back.
    And now we recognize the gentlelady from California, Ms. 
Chu, for 5 minutes.
    Ms. CHU. Mr. Rivera, the CARES Act provided $25 million for 
SBA to develop resources in non-English languages. And I do 
want to recognize the agency for publishing several guides and 
translations in 17 languages.
    Asian-American businesses have been particularly hard-hit 
by the COVID pandemic. And nearly 175,000 Asian-American-owned 
firms do business primarily in non-English languages. And, in 
fact, one-third of the community is limited English proficient.
    If SBA does not fulfill its mandate to reach these firms 
with in-language materials and services, they risk being left 
behind during our recovery.
    The EIDL portal remains available only in English, and the 
agency has still not updated Congress on what actions it is 
taking to proactively reach out to business owners with limited 
English proficiency.
    So could you explain what specific steps your office has 
taken to ensure that EIDL is accessible to business owners with 
limited English proficiency, especially considering we provided 
$25 million for SBA to develop resources in non-English 
languages?
    Mr. RIVERA. Thank you, Congresswoman.
    We translated fact sheets into, I think it was, 17 
different languages.
    And I am looking at the Chairwoman. I remember, during 
Hurricane Maria, we choked when it came to the language 
services.
    So, we have a $2 million contract where we use translators. 
We have not heard anything, from the language services 
perspective, when it comes to being unable to translate.
    We do understand that need. Our application is still in 
English. We have an application in Spanish. And we will 
continue to try to figure out how to get more languages as we 
proceed.
    Ms. CHU. Like I said, you have been provided $25 million to 
translate. And the reason that you haven't heard anything is 
probably because those people with limited English proficiency 
are shut out. So I would urge you to translate those 
applications.
    Mr. Rivera, Congress took steps to ensure that sole 
proprietors, independent contractors, and the self-employed 
were fully included in the small-business recovery resources 
made available during this crisis. And that includes the EIDL 
emergency grant program established by the CARES Act, which 
Congress specified was to be valued at $10,000 per applicant 
and, along with a traditional loan, would work in concert with 
the Paycheck Protection Program. EIDL would provide a quick 
injection of working capital to meet operating expenses, and 
the PPP would enable businesses to retain their employees.
    I am deeply concerned about SBA's actually rather shocking 
decision to cap the emergency grant at just $1,000 per 
employee, as is inconsistent with congressional intent and has 
had a disproportionate impact on these independent workers, 
including so many in the world-class creative economy in 
southern California.
    These independent businesspeople also have fixed costs that 
they are struggling to pay, and many creative industries in my 
district, in fact, have halted production to comply with public 
health guidelines.
    So you specified in your testimony that the SBA made 
adjustments to the EIDL grant in order to make the funding last 
longer, but how does the SBA justify cutting the grant's value 
by 90 percent for independent contractors and sole proprietors? 
Does the agency have plans to make adjustments to the grant 
formula so that it can meet the needs of these types of 
business owners?
    Mr. RIVERA. We put a lot of analysis into these 
determinations, these decisions. At the agency level, the 
decision was to do $1,000 per employee. If you were self-
employed, you know, zero employees, you received a $1,000 
grant.
    Had we used $10,000, we would have been out of funds 
immediately. We did get the first $10 billion, and then we did 
get the subsequent $10 billion. We are currently--I think this 
morning it shows we are, like, at $15 billion, $16 billion. We 
would have been run out of money.
    And what we are trying to do, basically, is just provide as 
much assistance across to as many small businesses as possible. 
And that is the approach we took.
    Ms. CHU. And why is it that you have not deputized SBDCs to 
provide timely information?
    Mr. RIVERA. I have to get back with you. I need to have a 
conversation with the Assistant Administrator. I thought we 
were providing clear guidance and clear communications 
internally.
    As I mentioned earlier, the information we have internally 
sometimes gets out before we are able to distribute it through 
the entire resource partner network.
    Chairwoman VELAZQUEZ. The gentlelady's time has expired.
    Ms. CHU. Thank you. I yield back.
    Chairwoman VELAZQUEZ. And now we recognize the gentleman 
from Ohio, Mr. Balderson.
    Mr. BALDERSON. Thank you very much, Madam Chair.
    And thank you for being here today with your testimony and 
answering some of our questions.
    A question I was asking was already asked by a colleague, 
but I would like to expand on that a little bit. Mrs. Radewagen 
asked you--and I want to continue from her question--about 
America's small businesses through previous disasters.
    You used the example of Hurricanes Harvey, Irma, and Maria 
as well as floods across the Midwest. Hurricanes Harvey and 
Irma in 2017 were just weeks apart from each other. For these 
2017 storms, did SBA close the EIDL portal for one sect of the 
population?
    Mr. RIVERA. I am sorry. Can you repeat the last part of 
that question?
    Mr. BALDERSON. Yes. Did the EIDL portal for one sect of the 
population--for these 2017 storms, did the SBA close the EIDL 
portal for one sect of the population?
    Mr. RIVERA. No, I don't believe we did.
    I mean, we are working on two different systems right now. 
We have the Disaster Credit Management System that is handling 
all non-COVID, and then this specific portal is specific to 
COVID by itself.
    Mr. BALDERSON. Okay.
    Mr. RIVERA. We have done a billion dollars' worth of 
natural disaster loans this year that are non-COVID. So that 
track continues to go, you know, business as usual, from that 
perspective.
    Mr. BALDERSON. Business as usual. Thank you.
    Followup to that: During any previous disaster where EIDL 
funds were awarded by the SBA, was it ever the policy to shut 
out applicants from one disaster in order for other requestees 
to have access to EIDL funds?
    Mr. RIVERA. No, not that I am aware of.
    You know, EIDL funds are 2 percent of natural disasters.
    Mr. BALDERSON. Okay.
    Mr. RIVERA. Most of the loans are to homeowners. A lot of 
people don't understand that Congress gave us the authority 
back in 1953 for homeowners. The lion's share are homeowners 
and then businesses. And then, as part of the business loan, 
there is an Economic Injury Disaster Loan component.
    But I am not aware of that, but I can check back with you 
if there is a misunderstanding.
    Mr. BALDERSON. No. Thank you very much.
    And, Madam Chair, I yield back my remaining time.
    Chairwoman VELAZQUEZ. Mr. Balderson, would you yield for a 
second?
    Mr. BALDERSON. Yes, ma'am.
    Chairwoman VELAZQUEZ. So is your question related to the 
fact that the SBA EIDL Program shut the portal just to allow 
agricultural borrowers to apply for loans?
    Mr. BALDERSON. Yes, Madam Chair.
    Chairwoman VELAZQUEZ. So he is asking you if there has been 
in the history of the EIDL Program any time where one group is 
coming in, like the agricultural, the farmers, and then 
shutting the portal for everybody else.
    Mr. RIVERA. Well, we process concurrently. As I mentioned 
earlier, we continued with the EIDL track, and then we had an 
ag track continuously at the same time.
    Chairwoman VELAZQUEZ. Yeah, but these are COVID-19-related 
borrowers, farmers applying for loans. And non-farmers were not 
allowed to apply, because the portal was shut down for them.
    Mr. RIVERA. Well, the--oh, I am sorry. I understand your 
question now.
    Chairwoman VELAZQUEZ. Why did you make that decision? And 
who made that decision?
    Mr. RIVERA. It was an agency determination.
    Chairwoman VELAZQUEZ. Why?
    Mr. RIVERA. Because Congress gave us the authority to make 
loans to farmers. Disaster wasn't able to make----
    Chairwoman VELAZQUEZ. But Congress didn't give you the 
authority to shut down the portal to every other borrower that 
was injured by COVID-19.
    Mr. RIVERA. Right. But since we have opened the portal up 
since June 15, I mean, we accepted those 500,000 applications 
that were in the queue. So, I mean, they delayed maybe, what, 2 
weeks, 3 weeks?
    Chairwoman VELAZQUEZ. Do you realize how many borrowers 
were calling our offices, crying out because they needed 
assistance and the portal was shut down for them----
    Mr. RIVERA. Right.
    Chairwoman VELAZQUEZ.--and clearly stated----
    Mr. RIVERA. I understand.
    Chairwoman VELAZQUEZ.--shut down for you but open for 
agricultural.
    Mr. RIVERA. I understand. And I apologize for not answering 
your question earlier. I didn't quite understand.
    Mr. BALDERSON. I may have asked it incorrectly, so that is 
okay. Thank you.
    Mr. RIVERA. No, no. Thank you.
    Chairwoman VELAZQUEZ. I just would like to have a sense as 
to why that happened.
    Mr. RIVERA. Why the portal was only open for ag businesses?
    Chairwoman VELAZQUEZ. Uh-huh.
    Mr. RIVERA. Because, at the time, the decision was, let's 
let the ag businesses get in.
    We have not had authority for agricultural enterprises 
since the mid-1980s, so we had to stop and we had to retool the 
system. And then, during that period of time, we also got 
additional funding. We didn't have funding at the time. We 
needed to get the additional $50 billion. I mean, so there were 
some stops and go's.
    From the intent of why we went ag only, that was an agency 
decision.
    Chairwoman VELAZQUEZ. Okay.
    I yield my time from Mr. Balderson.
    Mr. CHABOT. Thank you.
    If the gentleman would yield, I will be very brief.
    Just for those dozens of people who might be watching at 
home, the thing that we have to have out there is the fact that 
the EIDL loan program was not open to agriculture or farming 
originally, and then we passed legislation to open it up to the 
ag community. So, for a period of time, it was only open to the 
ag community, although the applications were still there, and 
then it has reopened again.
    So, I mean, that was the reason behind this. Because it 
hadn't been open, so you had people in the ag community that 
weren't even eligible for a long time. Then they were.
    Now, I mean, I understand why we might at this point argue 
with that decision. I had people in my district that were not 
ag that were wondering, why can't we get this?
    But that was the reason, correct?
    Mr. RIVERA. Yes, sir.
    Mr. CHABOT. Okay.
    Thank you.
    Chairwoman VELAZQUEZ. Badly communicated to the general 
public.
    Mr. RIVERA. I understand.
    Chairwoman VELAZQUEZ. Now we recognize the gentlelady from 
Minnesota, Ms. Craig, for 5 minutes.
    Ms. CRAIG. Thank you so much, Madam Chairwoman.
    Mr. Rivera, I am sitting here, and this isn't my prepared 
question, but I just want you to understand, if you really 
believe that ``The agency could do better'' is the best 
response to the performance--you know, I have a lot of 
businesses in my district who, if this were the kind of 
customer-service level that they had provided, they would be 
out of business 3 months ago.
    You know, I am sitting here today going through my email, 
because I have folks in my district who applied and heard 
crickets for months. No response from the EIDL Program 
application.
    I have a gentleman in my district who finally got a 
response from you that there was missing information on his 
application. And we even elevated this to the regional acting 
director in my office. We were told there was a 24-hour email 
line that Members of Congress could use in order to help our 
constituents get a response on their EIDL loan applications. 
Nine days later, we got a response to that email that says 
there was missing information, and still not telling us, so 
that we could tell our constituents, what information was 
missing or what was needed to help that application.
    So the Chairwoman has brought up the lack of communication, 
but I am just telling you, in case no one else on your team is 
telling you directly, that the customer-service levels our 
constituents are facing is terrible in this program.
    And I understand--I spent 22 years working in business 
before I came to this Congress and came to this committee, so I 
understand the volume. I understand that you guys are under a 
lot of pressure to respond here.
    But 6 days ago, I sent a response, again, asking for 
someone, please, to help this constituent, and I am sitting 
here today and still we have no response. And I am a Member of 
Congress. I can't even imagine what is happening on a daily 
basis inside the customer service group.
    And so, you know, I just want to make sure no one is 
sugarcoating this for you, because I am not going to sugarcoat 
this for Minnesotans or for the American people. The 
administration of this program has been absolutely terrible.
    I just want to say also that, you know, I understand this 
meeting is about EIDL. And I didn't come here today--I came 
here to ask a question, but somebody has to tell the truth 
about what our constituents are facing.
    And I appreciate the hard work you have done, Madam 
Chairwoman, to finally get a member of the SBA to come in front 
of this committee.
    I have sent a number of letters to the Administrator, Ms. 
Carranza. And I want to make sure that, during this hearing, I 
also have an opportunity just to say that the response on the 
PPP program has been equally unacceptable.
    I understand that, for a recent GAO report, your 
Administration waited until the very last day to respond to 
requests for data to the Government Accountability Office and 
only replied when that data had already been made public.
    Why are loan-level data not being released at this time, 
even to the Government Accountability Office?
    We need a commitment to release a comprehensive list of 
firms who applied for and received aid under the PPP. We need 
to make sure that transparency is essential to understand that 
these funds went to good use. See, that is our role as Members 
of Congress, to make sure that we are doing the best job that 
we can to oversee the use of taxpayer dollars.
    So, Mr. Rivera, I want to just say, I appreciate you being 
here today, number one. I know that this isn't going to be all 
that much fun. But I want to make sure you understand that what 
has been happening, understanding there have been a lot of 
challenges with the volume, is simply unacceptable.
    Mr. RIVERA. So, thank you for your comments. We don't take 
it lightly when we are not providing the customer service that 
we need to do. If we can talk offline, we can see whatever the 
issues are.
    As I mentioned, you know, this morning's report. We get 
individuals on the loan side through in 5 days; grants, 2 days. 
Was the service slower before? Yes. Are we still getting--you 
know, we passed 7 million calls at the call center yesterday.
    A lot of work for a lot of individuals, and we are doing 
the best we can. And if there are opportunities on how you can 
help us or if we need to get better service with you, just let 
us know; we will be glad to provide that service.
    Ms. CRAIG. That is what I was told a month ago.
    Mr. RIVERA. Okay. Well, I will continue to do my best. I 
don't know what else to tell you from that perspective.
    Ms. CRAIG. Thank you, Madam Chairwoman. I yield back.
    Chairwoman VELAZQUEZ. The Chair recognizes the gentleman 
from Oklahoma, Mr. Hern.
    Mr. HERN. Thank you, Madam Chair.
    Thank you for being here today and answering questions 
regarding the EIDL Program.
    I always find it interesting when we complain about 
inefficiencies of government yet have colleagues who want to 
make it bigger. It has always been perplexing. Because I have 
been around, as you can tell from a few gray hairs, a while, in 
business for 35 years, and I can't think of any agency in 
government that has ever been very efficient, as compared to 
industry that is accountable directly to a customer for its 
existence.
    With all that said, we have spent a lot of time--in fact, 
all of our time--here today talking about the current history 
of the program and how it has compared to other programs that 
you have been involved in, with either 9/11 or geographies, 
wind disasters, and things like that.
    I would ask you to compare those two. I have heard a lot of 
this, as it pertains to business interruption insurance, why it 
is not viable for a national pandemic or a national disaster 
versus a localized geography disaster.
    One thing I would ask you--and I think this would be a very 
bipartisan request that shouldn't be controversial at all. It 
should give you a chance to perform at a very high level. There 
is very fresh, this is very raw, these comments coming from 
here and from your customer base, the people applying for the 
loans.
    Could you commit to us between now and the end of the 
quarter, now that we are in a new quarter, Q3, so prior to any 
potential administrative changes, you know, people running the 
agencies or whatever, could you commit to us about assembling 
best practices that you have learned from this that you could 
apply?
    It is very difficult to take--and I know you have done it 
with your experience--try to take a localized disaster and 
extrapolate that across a national disaster. You have tried to 
do that, and you are a little behind the eight-ball on that, or 
a lot behind the eight-ball in certain areas. But it would be 
very easy to take a national pandemic disaster and localize it.
    So if we could get from you a commitment from you at this 
hearing today that you and your team could put together a 
playbook, if you will, for a simplistic term, that would 
identify things you should do better, like who you should 
communicate to and when you should communicate it and what 
should be communicated.
    Because we can all sit here and talk about learning, as we 
did in our office, about the $150,000 cap from The New York 
Times or The Wall Street Journal or the Washington Examiner, we 
could go through all of these different things; it doesn't 
solve our problem, and it doesn't prevent those problems from 
happening in the future.
    We need, kind of, skin in the game, a commitment in the 
game, because then that carries on beyond the ideas and the 
things that are going to make it work in the future when this 
happens again--and we hope it is a long time and none of us are 
here when it happens again--but those in the future. Because I 
think history matters. It matters a lot. It identifies what we 
shouldn't do again and what we should do right the next time.
    If you could help us put that into a format that could be 
given to this committee so that we can hold each other 
accountable and remind each other of what we need to be doing 
as we go forward. Can you commit to that?
    Mr. RIVERA. Absolutely.
    Mr. HERN. So September 30, 2020?
    Mr. RIVERA. Absolutely.
    And if I can just have, like, 15 seconds.
    Mr. HERN. Sure. You can have a minute and 34 seconds.
    Mr. RIVERA. Okay. Thank you.
    COVID--viruses were not in the Small Business Act before 
March the 15th. We weren't responding to COVID.
    We do have a playbook. You know, we have the Disaster 
Preparedness and Response Plan. It is for natural disasters. I 
think we have proven ourselves when it comes to a Harvey, Irma, 
Maria footprint. You know, we had a 15-, 20-day response----
    Chairwoman VELAZQUEZ. Not in Puerto Rico.
    Mr. RIVERA.--for----
    Mr. HERN. Mr. Rivera, if I may, though. I would acknowledge 
that you have those. And that is because we have all had to 
deal with regional disasters.
    But now we have, in our lifetime, in our legislative 
lifetime, in your administrative lifetime, executive branch 
lifetime, you have a national pandemic. And we don't have that, 
from 1918 Spanish Flu, to rely on now. Because I would imagine, 
many of the things that we had then, sans the technology, would 
be doing the same. We would be communicating in a different 
format then, but we had the ability to instantly communicate.
    And I had people calling me, like many others did. They 
thought they were going to apply for a $2 million loan. They go 
through all the process and told $150,000, and, in their mind, 
they have wasted a lot of time. They could have gone to a bank 
and stood up their business quicker.
    So there was just this lack of communication, which is 
usually what destroys most relationships and everything that we 
do. So if we could just get a communication process plan that, 
again--and I took a minute and 20 seconds of your response 
time.
    But I am acknowledging that you have good regional disaster 
plans, because we, unfortunately, have to deal with them time 
and time again, year after year. But it could be 20, 30, or 40 
years again, but we will indwell forever in the congressional 
records and possibly through legislation a process for how to 
handle national epidemics/pandemics as we go forward.
    Mr. RIVERA. Yes, sir.
    Mr. HERN. Thank you.
    Mr. RIVERA. Thank you.
    Mr. HERN. I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    And now we recognize the gentleman from Minnesota, Mr. 
Stauber.
    Mr. STAUBER. Thank you, Madam Chair.
    And I appreciate, Mr. Rivera, your being here.
    You know, we know that the Small Business Administration 
was really given a nearly impossible task. Overnight, they were 
asked to assist every single small business across our Nation 
that fell on hard times. And I commend the work you have done 
thus far, but there is a lot more to do.
    I do want to share some concerns that were brought up here 
earlier from my constituents. It seems that the SBA has taken 
some liberties to reduce the cap of loans given out, from $2 
million to $150,000. While this is likely to ensure the maximum 
number of businesses receive some sort of funding during this 
crisis, my constituents are rightfully upset. They feel they 
are being cheated out of what they were promised by our 
government.
    With that said, I will be focusing my line of questioning 
on the portal.
    Can you share with us what the SBA is reviewing exactly 
when an applicant sees, quote, ``Processing'' in the EIDL 
portal?
    Mr. RIVERA. Sure.
    This is the first time--because we used a streamlined 
application--we actually identity-proofed every small business 
that came in. So, for example, the business name needed to be 
the same as the name on your checking account. We identity-
proofed addresses. We identity-proofed a lot of these 
processes.
    As we moved the small business from the application portal 
into the loan portal, that was a quick credit check based on a 
credit score. And once you passed that credit score, then we 
determined economic injury, 6 months of working capital.
    That is what the loan was based on--working capital, 
economic injury. It is pretty simple. It is sales minus cost of 
goods sold, so whatever the gross profit was. That is basically 
your loan, from that perspective.
    The EIDL loan program is meant to pay for fixed operating 
expenses. It is not for expansion or, you know----
    Mr. STAUBER. Right.
    Mr. RIVERA.--similar to 7(a), 504s.
    But those were some of the requirements that we looked at.
    Mr. STAUBER. Okay. With that being said, what is the 
average time between an application being submitted and the 
decision being made?
    Mr. RIVERA. Currently, we are running 41 days. For the 5.5 
million applications we process, we are running 41 days.
    Mr. STAUBER. So what is the hurdle that slows this process, 
from the time the applicant----
    Mr. RIVERA. Well----
    Mr. STAUBER.--comes to 41 days?
    Mr. RIVERA. Yeah. The staff, the amount of volume, standing 
up the portal.
    We had three stops in this process that is included in the 
41 days. We ran out of money. We had $7 billion; then we got 
the additional $50 billion.
    We had to build the portal for--we had to stop and do a new 
application when we got the grant program. We had to stop and 
do a new application when we got the ag component to it.
    So, there have been three hard stops in that process.
    Mr. STAUBER. So my colleague from Minnesota brought up a 
good point. When you have an application and they have waited 
days and days and they call and you have said it wasn't filled 
out correctly, is there a faster way to do that immediately?
    Mr. RIVERA. Yeah. So, we have learned a lot when it comes 
to filled out correctly. We weren't requiring tax transcripts. 
We weren't requiring any other due diligence. It is a self-
certified form, from that perspective.
    So, I need your help if you have examples of where you say 
that somebody said it wasn't filled out correctly. I am kind of 
curious to see what exactly they are being asked for.
    We are very crisp on, when we do the decision, we decision 
it and then we move on. And then they have the opportunity to 
come back for reconsideration.
    Mr. STAUBER. What is the SBA doing to ensure applicants 
have the most access to the information, guidances, status 
updates, and other important information during this economic 
downturn?
    Mr. RIVERA. Yeah. So that is one of the things--looking 
back, specifically for the EIDL Program, we didn't have a 
transparent portal for the small-business owners as we do with 
the Disaster Loan Application Portal. Congress gave us that 
directive years ago, so we built this portal so you can go in 
and you can figure out where you are at in the queue, from that 
perspective. We didn't do that. In hindsight, we should have 
done that. And, you know, that is a lesson learned that we 
have.
    Mr. STAUBER. Well, I appreciate you being here and taking 
our questions. I mean, the goal is, when you know better, you 
do better. This pandemic came to our shores through no fault of 
our own, and we are going to get through this together. But we 
need you and other members at the SBA to really understand 
livelihoods are at stake, much of our economy is at stake, and 
small businesses are the engine of our economy, and we are 
going to need much more help.
    And I yield back. Thank you.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    And now we recognize the gentleman from Florida, Mr. Spano, 
for 5 minutes.
    Mr. SPANO. Thank you, Madam Speaker. I appreciate that.
    And I just would like to associate myself with many of the 
comments related to concerns expressed about communication. I 
will say, in my district, I got literally hundreds of calls 
with respect to the frustration that business owners were 
having getting information and not having questions answered 
and so forth, not knowing about the status of their 
applications. And so, just want to reiterate that. We can do 
better, and we have to, frankly.
    What is the current level of funding that remains under the 
EIDL Program?
    Mr. RIVERA. So, we have $360 billion, and we have loaned 
$130 billion----
    Mr. SPANO. Okay.
    Mr. RIVERA.--so what is that?
    Mr. SPANO. About----
    Mr. RIVERA. 230.
    Mr. SPANO. 230. Okay.
    Mr. RIVERA. Yes, sir.
    Mr. SPANO. Do you have any projections as to how long those 
resources will last, given the current run?
    Mr. RIVERA. We do that in-house daily. We have a meeting 
with the Chief of Staff, with the Chief Financial Officer, with 
the Chief Operating Officer. There is a team of about five, six 
individuals, and we do that analysis daily, from that 
perspective.
    We have a queue of 8 million. We feel that we can--there is 
room with 8 million, at some point. I am not sure when.
    Mr. SPANO. All right.
    Mr. RIVERA. But we do that analysis daily.
    Mr. SPANO. Your best guess would be, we are going to run 
out in a month? We are going to run out in 3 months?
    Mr. RIVERA. No, I am not----
    Mr. SPANO. What would you say?
    Mr. RIVERA. I apologize, I am not in the guessing game.
    Mr. SPANO. Yeah.
    Mr. RIVERA. This analysis is pretty comprehensive. It 
contains a lot of factors--our approval rate, how many 
applications are pending----
    Mr. SPANO. Okay.
    Mr. RIVERA.--from that perspective.
    Mr. SPANO. Let's go this route. At the current rate, the 
burn rate, what are you extending in loans per week right now?
    Mr. RIVERA. We are running--and I can share this 
information with you. I mean, we have had some big weeks. Last 
week, we did $14 billion in approvals.
    So, you know, our biggest week was the week of May 31, $24 
billion. By the way, Katrina, Rita, Wilma was $11 billion, so 
we did two Katrinas in a week--Katrina-Rita-Wilmas in a week.
    So, you know, I haven't put the math on this $14 billion, 
$15 billion, but if you are looking at 200-and-something, a 
couple of months.
    Mr. SPANO. Okay.
    Over the last couple of weeks or several weeks in June, 
let's say, has the number of loans extended gone--or the amount 
of loans, given has it come down each week?
    Mr. RIVERA. We have fluctuated between 200,000--I mean, the 
week of May 31, we did 400,000 approvals; the week of June 7, 
200,000; the week of June 14, 300,000; the week of June 21, 
300,000. So, it is pretty steady-state.
    Mr. SPANO. Okay.
    One of the things that has been mentioned was the decision 
to cap the amount of the grants at $1,000 per employee. That 
was my understanding. Why was that decision made? And second 
question is, was that communicated to applicants and was it 
communicated to Members of Congress prior to the decision being 
made?
    Mr. RIVERA. So, the decision was based on--at the time, we 
had $10 billion. We have approved 4.8 million applications, so 
we would need $48 billion. We have 20. So we based the 1-to-10 
based on, you know, some due diligence we did. We communicated 
when we had the discussion with the small business committee.
    Mr. SPANO. Okay.
    Mr. RIVERA. We didn't communicate, you know, the 1-to-10 
ahead of time, and, in hindsight, we probably should have.
    Mr. SPANO. Yeah, I think that probably would have been a 
good idea, because we were getting calls from our constituents 
saying, I just got $3,000 dumped into my account last night, 
but I have no idea why it was $3,000.
    Mr. RIVERA. No, that is a really good point.
    Mr. SPANO. Yeah. Yeah. So that would be helpful. I think 
that goes in line, again, with the importance of communication, 
I think, that some of the other members have expressed concern 
about.
    That is all I have. I yield back. Thank you.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    And now we recognize the gentleman from Illinois, Mr. 
Schneider.
    Mr. SCHNEIDER. Thank you, and good morning. And sorry, I 
was on the floor speaking, so I am just getting here and 
catching up, but wanted to touch base.
    I know this has been a challenging time for the SBA over 
the last several months. It is a challenging time, obviously, 
for our country. I had a conversation on Monday with the 
Administrator, talking about some of the issues we face with 
the EIDL Program.
    I know I heard from so many people about the uncertainty--
we are in uncertain times, to begin with. This virus, the 
pandemic, the response has created so much anxiety for 
businesses. Will they be able to get through just day to day? 
And we piled on top of that, unfortunately, with so much of the 
stutter steps and challenges we faced with the loans.
    In my own district, as an example, we had a wonderful 
webinar. The SBA folks in Illinois are working so hard and 
just, you know, bending over backwards. But they told our 
businesses--and there were 1,000 people on this call--that they 
would have a decision within 21 days--or, the money within 21 
days and the advance, $10,000 advance, within 3 days. 
Obviously, that didn't happen.
    So I guess where I would start with is, you know, we are 
where we are now. We have the decision of the $150,000. We have 
the change in how that emergency $10,000 was let out. June 30 
has come; it is July 1. What do we tell to our businesses? How 
do we give them the confidence that the SBA is going to be 
there for them, is going to give them the information?
    You know, I can order a pizza and track it from the time of 
order to delivery, every step along the way, and know when it 
is going to arrive. Our businesses should be able to at least 
have a similar sense of, when they apply for a loan, how much 
they are going to get and when they are going to get it.
    Mr. RIVERA. So thank you for spending some time with the 
Administrator in the call that we had on Monday.
    So, today--let me fast-forward to today. Over the last--
since the beginning of time since we started this in mid-March, 
we are running about 41 days to fully process these loans, 
approve/decline, from that perspective.
    What are we doing right now? I looked at this morning's 
report. We are processing grants in 2 days. We are processing 
loans in 5 days. Everything has been processed that is not in 
this application portal; it is in either the loan queue or the 
grant queue, from that perspective.
    So, you know, in hindsight, I wish we could have been 
quicker. I wish we could have maybe been a little bit more 
communicative, now that I am hearing a lot of----
    Mr. SCHNEIDER. This is going to come off more harsh than I 
mean it, but, you know, we went through this crisis, we did try 
to slam a whole lot through a small pipe in a very short time, 
but, being perfectly honest, when I hear, ``We are doing really 
well now,'' that is kind of like the diner saying, ``We got 
crushed at lunch, but at 3:00 in the afternoon things look 
fine.''
    But I know there is going to be a dinner hour. I know that, 
as these loans, the money that companies have borrowed is 
consumed, they are going to need to come back and they need 
more help. I am confident that, in a bipartisan way, we are 
going to find a way in Congress to help these companies.
    What is the SBA doing today, in that afternoon lull, to 
make sure that when we get to the next rush that we won't fall 
back into the 41-day timeframe?
    Mr. RIVERA. Well, we don't consider 2 million to 3 million 
applications in the queue a lull right now. I mean, we are 
still working 7 days a week, you know, the 10 to 12 hours a 
day.
    We have learned a lot, but what I meant to say or what I 
intended to say is that we are a better organization today than 
we were when we started this process back in mid-March. The 
system is working faster. We have individuals through the 
queue. We have gone from 1,000 employees up to 7,000 employees. 
We are better trained, we are better prepared, as we continue 
through this journey.
    Mr. SCHNEIDER. Are there specific changes that you have to 
improve that? Are the changes completed and ready to go? And if 
they are not completed, what is the timeline to get them 
complete?
    Mr. RIVERA. So, we are pretty complete from the perspective 
of things we have learned as we go through. I mean, every week, 
we have a different build to address a specific issue. So we 
are in a good place right now, but we still do have a lot of 
work that we need to complete.
    Mr. SCHNEIDER. Okay. And I know this is changing week to 
week, but that is one of the frustrations so many businesses 
had, is that things kept changing week to week coming from the 
SBA and Treasury. The instructions kept changing on the EIDL 
loans. There was an Application 1 and then an Application 2, 
uncertainty of whether I was going to keep my place in line if 
I did the first application when I applied for the second 
application.
    I know we are going to have to be flexible, we are going to 
have to adapt, because this virus is so dynamic. But what 
confidence can you give not just me and my colleagues but every 
small business in this country that the SBA is going to provide 
some stability in this storm?
    Mr. RIVERA. Well, I mean, we pride ourselves on customer 
service. I know we have not been successful, in many 
individuals' minds. But we have provided this $130 billion to 
2.1 million small businesses that employ 11 million people. I 
mean, so I think we have had some level of success.
    Could we do better? Always. I mean, we continue to strive 
to be the best. And that is why we continue to have these 
weekly sessions where we try to figure out what is the 
challenge that we need to address next and continue on.
    Mr. SCHNEIDER. Okay. And I don't want to question your 
intent or any SBA employees' intent. I know how hard everybody 
is working. I know that we are asking the world of you. But, at 
this moment, in this crisis, we need the world from you. And we 
are here to give whatever help we can, but we really need the 
SBA to step up and deliver in the next round.
    With that, I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    And now we recognize the gentleman from North Carolina, Mr. 
Bishop, for 5 minutes.
    Mr. BISHOP. Thank you, Madam Chairwoman. And sometimes 
there are advantages, I think, from being dead-last or close to 
dead-last.
    Thank you, Mr. Rivera, for being here.
    I want to take a moment to say how excited I am that we are 
back in our committee room or in a committee room. I think it 
benefits the dynamic, and for those who can or desire to be 
here, we can have that interaction in person.
    I want to thank, momentarily here, Joe Hartz of our 
Committee staff for his work in enabling me to do that even 
when we weren't in a committee room.
    And in the comments, I think, here on the topic, Mr. 
Rivera--and I thank you. I was listening to the arrows coming 
at you, and, you know, maybe some of them are partially 
deserved, and you have to take them all.
    I want to associate myself with the comments of Mr. Hern, 
in particular, and I wanted to sort of strike a balance in what 
I ask you. Because I do think it was striking to me, reading 
your testimony--and there was one part I wasn't 100 percent 
clear on. And the numbers probably would, you know, make 
people's eyes glaze over a little bit. But when you talk about, 
you know, all of the disaster loans approved by the SBA since 
1953, you know, this was, like, by a factor of a couple more 
bigger than that. I think I have that right.
    And even if you get down to businesses, I think it said all 
the business disaster loans up until COVID-19 are, like, 20.9 
billion. And then the numbers--I don't think this is just 
business loans, but the ones approved as of June 26, over 125 
billion. It is just a ton of work that you were saddled with.
    I do have this observation, though. As I heard, you were 
talking about a 41-day turn time. When Congress--and my being a 
new Member--when Congress first appropriated money in that pre-
CARES Act to the Disaster Loan Program, I was gearing up to go 
out and evangelize that. And then I heard from talking to the 
regional administrator in my State that it took 30 days, 
roughly, to get a loan out, and I was like, ``Whoa, why so 
long?'' And then I talked to a Member who said the Disaster 
Loan Program is really kind of a disaster.
    And so I don't know what the--I don't have the experience 
to know what the background was. So I have heard the Chairwoman 
speak about it here today a bit, a variety of topics that have 
been raised. I think the thing is that, you know, we have a 
culture in which, you know, people expect pretty good speed, 
and they are dealing with the private industry, Rocket Mortgage 
or whoever else, and things happen pretty quickly.
    Do you try to establish standards, though, for the program, 
not just in this crisis period but before, to compare 
yourselves in terms of speed and efficiency and effectiveness 
to the private sector?
    Mr. RIVERA. We do.
    As I mentioned, when I was first having this discussion 
with Administrator Carranza--we have a Disaster Preparedness 
and Response Plan. It has four levels: you know, zero to 50,000 
applications; 50 to 250; 250 to 500; and 500-plus. We give 
ourselves 15, 30, 45, 60 days. That was out of the window day 
one. This COVID is not the disaster model that we have ever 
followed. We had to just start from scratch.
    We do use that private-sector company that does lending, 
and we use that platform, but we had to stop for 2 weeks in 
order to develop that platform, because, you know, I can't 
survive--``survive'' is not the right word--but two loans per 
loan officer per day is not acceptable. I mean, we are doing 
25-plus.
    So, we are trying to use as many private-sector best 
practices that we can. Had we not had that Harvey-Irma-Maria 
contract for surge, we would have had to have gone out.
    So, we thought we were prepared. We learned a lot.
    Mr. BISHOP. Yeah.
    Mr. RIVERA. The level of preparedness is just something 
that we need to continue to work on.
    Mr. BISHOP. You mentioned one thing that struck me, that 
you began to use DocuSign. And what struck me about that, 
frankly, was, people have been using DocuSign with me as a 
private individual for a decade maybe, maybe more. Why not 
earlier on things like that--that as an example and things like 
that?
    Mr. RIVERA. Yeah. That is part of being the government. We 
are just trying to use the money as judiciously as possible.
    But it is a proven fact now, we can get a disbursement out 
in a day. So everything is digital from that perspective. The 
platform is there. We just haven't gotten around to spending 
the money for that, but now that we have that, I mean, that is 
the path forward.
    Mr. BISHOP. I think, bottom line--I will say this--I think 
some of the blame is borne by Congress. We appropriated money 
to that program. I was ready to go out and sell it, tell people 
that was a path for relief. I think those Members in Congress 
had a reason to know that that was going to be a problem, and 
those expectations were, in part, created here.
    I do commend you, and I encourage you to think of the 
private-business way as often as possible, because I think if 
you are chasing a service standard that you see in the private 
sector, you are probably going to do a better job than 
excluding that from your thought.
    Thank you, sir.
    Mr. RIVERA. I understand. Thank you.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    And we are going to go to a second round for any member who 
wishes to make any questions.
    I have two or three questions, Mr. Rivera.
    So you said before that the denial rate was 48 percent, 
right?
    Mr. RIVERA. Yes, ma'am.
    Chairwoman VELAZQUEZ. And that represents, out of 5 
million, 2.5 million people.
    Mr. RIVERA. Yes, ma'am.
    Chairwoman VELAZQUEZ. So what recourse does an applicant 
have if they feel they were wrongly denied? Who conducts those 
reviews, and what is the average processing time?
    Mr. RIVERA. So, when we decline somebody, we give them 
reconsideration rights.
    We went off strictly a credit score. I mean, that is the 
fast process that we used. When we go under reconsideration, we 
ask for--if they are a self-proprietor, we ask for a copy of a 
Schedule C or some type of business application that shows--
because there may be repayment ability even though you have a 
lower credit score.
    That is the historical approach----
    Chairwoman VELAZQUEZ. Okay.
    Mr. RIVERA.--so we are using that approach.
    Chairwoman VELAZQUEZ. But you just said that this pandemic, 
or this disaster, is unprecedented. There is no comparison. So 
why is it that you didn't consider the national impact of this 
pandemic? Did SBA at any time consider modifying the 
underwriting minimums?
    Mr. RIVERA. Well, the credit score we use is D paper, if 
you look at the private sector. It is not A, B, C. It is D 
paper. The credit score is pretty low. And, unfortunately, I 
mean, we have to set up a standard, and that is the standard we 
use. We could have lowered it, but the risk associated with 
lowering it was the decision we didn't make.
    Chairwoman VELAZQUEZ. Okay.
    So what do you need today from us?
    Mr. RIVERA. I think we are in a good spot. Obviously, we 
need to do better communication----
    Chairwoman VELAZQUEZ. Okay. So let me ask you, given the 
fact that we have seen a spike in the virus in different places 
and also that some States are either shutting down or halting 
reopening, those businesses are going to be impacted. Florida, 
Colorado, Arizona. Do you expect for many more millions of 
businesses to apply for the disaster----
    Mr. RIVERA. So the declaration period for the Economic 
Injury Disaster Loan Program is 9 months. It runs from the 
middle of March to the middle of December, I mean, so we will 
continue to process any applications we have, you know, as long 
as there is funding available.
    Chairwoman VELAZQUEZ. As long as the money is there. So my 
question is, do you think that, based on what is left--how much 
money is left in the EIDL Program?
    Mr. RIVERA. We had $360 billion, and we have spent $130 
billion, so we have $230 billion.
    Chairwoman VELAZQUEZ. And so are you making or doing any 
economic impact of the trend that we are seeing in other 
States?
    Mr. RIVERA. We are responding to the 8 million applications 
we have. I mean, we have not done the analysis of another 
pandemic, from that perspective, I mean, but we do a daily 
analysis on how much money is left and what is in the queue.
    Chairwoman VELAZQUEZ. So this is the thing. You, the 
Administration, requested $50 billion. I supported $100 
billion, and SBA said that they needed half of that. It is 
showing that you needed more than half of that.
    Mr. RIVERA. I am not sure how I am supposed to respond to 
that. I mean----
    Chairwoman VELAZQUEZ. Okay. Well, I am just warning you.
    Mr. RIVERA. Okay. I understand.
    Chairwoman VELAZQUEZ. My time has expired.
    The Ranking Member, Mr. Chabot.
    Mr. CHABOT. Thank you, Madam Chair. I won't use the whole 5 
minutes, but just a couple of followup questions.
    Mr. Rivera, I think, when asked about the period of time 
that it was ag only that you were accepting, agriculture only 
applications, I think you said 2 weeks.
    In conferring with my staff, we seem to think it was longer 
than that. Maybe from mid-April to mid-June, approximately, 
that it was only ag applications that you were taking. Can you 
clear that up?
    Mr. RIVERA. I need to fact-check myself.
    Mr. CHABOT. Okay.
    Mr. RIVERA. I will get back with you on that.
    Mr. CHABOT. Okay. That is fine. I am not trying to put you 
on the spot, but I do think it is longer than that. Because I 
know we were getting inquiries not only from people in my 
district but talking to other Members of Congress as the 
Ranking Member of this Committee, and it was, I think, an 
extensive period of time. So if you could check on that, we 
would appreciate that.
    And then, on that same topic, on that ag-only period of 
time, just for future reference, it would seem to me that there 
was maybe some more reasonable accommodation to those folks who 
were not ag during that period of time.
    Since ag folks didn't have access, I certainly appreciate 
you might want to get more of those folks, because now they are 
eligible, so you want to take care of them. That is certainly 
understandable. Maybe just, you know, pulling something out of 
the hat, maybe 50/50 or so, to say, okay, 50 percent is going 
to be set aside for ag, because you have never had it before. 
But there was still, I think, a considerable need, demand, for 
non-ag small businesses who needed these EIDL loans.
    So, just for future reference, I would just suggest 
considering something like that or consulting with Congress. 
Because we really didn't have much, if any, input. Some of 
those decisions were coming out, and we were having 
considerable difficulty getting our phone calls responded to--
understandably. You were very, very inundated with trying to 
help people all over the country, and that was your number-one 
priority. But, just for the future, we can get better, I think.
    If you want to comment, go for it.
    Mr. RIVERA. Understood.
    Mr. CHABOT. Sure.
    Mr. RIVERA. Thank you.
    Mr. CHABOT. Oh, you agree.
    Mr. RIVERA. Yeah, no, I agree. I think the communication 
piece needs to be----
    Mr. CHABOT. I appreciate that.
    And then, finally--and this is something we have all said, 
so I am not going to beat a dead horse here, but the 
frustration on both sides of the aisle. More than anything 
else, we just need to communicate better with each other--the 
Administration, the Congress--so that we can communicate with 
our constituents all over the country, who are, after all, the 
backbone of the American economy. Half the people who work in 
America work for a small business. About 70 percent of the new 
jobs created in the American economy, small businesses.
    So, you know, you all just need to communicate better with 
us and the American people so that we can communicate better 
with the American people too. Okay?
    Mr. RIVERA. Okay.
    Mr. CHABOT. Thank you.
    Mr. RIVERA. Thank you.
    Mr. CHABOT. I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    And now we recognize the gentleman from Pennsylvania, Mr. 
Evans, for 5 minutes.
    Mr. EVANS. Thank you, Madam Chairwoman, and thank you for 
your leadership on this discussion.
    When the EIDL Program first launched, many business owners 
in my district were very excited. However, that excitement has 
turned to frustration. Many constituent business owners have 
reached out to my office because they are waiting weeks or 
months to hear anything about their EIDL application. They were 
denied EIDL loans because of unsatisfactory credit scores, 
including my constituents.
    Now, the Chairwoman raised this in her introduction 
discussion, and the pharmacist that she talked about is someone 
who is in my district who testified before this Committee.
    All except one of the constituents denied--one Black. In 
fact, Black business owners in the U.S. have declined the most 
of any ethnic group, at 41 percent. This is quite concerning, 
coming from the city of Philadelphia, where over 40 percent of 
the population is African American.
    In addition, the information contained in the denial letter 
from the SBA was very sparse, as SBA did not indicate what 
application credit scores it was looking for.
    So the question I would like to ask: The CARES Act provides 
the SBA may use alternative appropriate methods to determine an 
applicant's ability to repay beyond their credit score. Does 
SBA consider applications based on criteria other than credit 
scores? That is the question I would like to ask you.
    Mr. RIVERA. So, to respond to your question, we started 
with credit score as part of the streamlined application, and 
if you want reconsideration, you can provide us with a copy of 
your tax return. We can get a tax transcript through the IRS. I 
mean, that was something that was waived by Congress.
    So, we use that as an indicator. And, you know, if the 
businesses come back and they ask us for additional assistance 
because they were declined, we can determine cash flow based on 
what they have reported, you know, to the IRS from a tax 
transcript perspective.
    Mr. EVANS. Uh-huh.
    I would like to then follow up with a couple other 
questions.
    Do different staff from the Office of Disaster Assistance 
handle the non-COVID disease loan applications?
    Mr. RIVERA. So, we have a dedicated team that is working on 
natural disasters. We have done a billion dollars' worth of 
natural disasters this fiscal year. We did $500 million in 
Puerto Rico from the earthquake that was earlier this year. And 
then we have dedicated teams that work on the COVID effort.
    Mr. EVANS. Is the processing time for these applications 
still within the normal timeframe?
    Mr. RIVERA. Well, according to our historical goals, we 
were supposed to process 500,000 applications in 60 days. We 
have done 5.5 million in 41 days. So, we are exceeding the 
internal goals. But, the goal is a goal; we need to get the 
assistance out as soon as possible, from my perspective.
    Mr. EVANS. Is there a need for additional staff?
    Mr. RIVERA. We are at 7,100 employees. We haven't stopped 
hiring. We are trying to get as many staff on board--one of the 
things--and let me just, if I can pivot for just a second. We 
talk about the private sector. We contracted with a company 
that allows us to have call agents 24/7. So we are open. And it 
is just based on need.
    It has been a phenomenal contract. It enabled us--of the 
7,100 employees we have, I would say probably 2,000 to 3,000 
are contractors. We have a traditional model where we have 
1,000 core employees and we have 2,000 to 3,000 reservists.
    So, you know, the combination of all these different 
factors is what we used in responding. We haven't stopped 
hiring, though. We will continue to hire until this event is 
completed.
    Mr. EVANS. One last question. If you had to rate the 
program yourself, particularly relating to how the African-
American community is affected, how would you rate it at this 
point?
    Mr. RIVERA. So, we don't collect ethnicity or race 
information in the Disaster Loan Program. We haven't collected 
that information since 1994. We don't know who an applicant is, 
you know, from a race perspective. We treat all applicants 
equal. From our perspective, a disaster is a disaster, and we 
focus on the disaster survivor and the small business, in this 
case.
    Mr. EVANS. Yeah, I understand that, but I guess what I am 
asking is, from a processing standpoint, I am not asking if you 
do it based on race, but in terms of how you think it has been 
effective. Because you obviously heard people raise questions 
about its effectiveness.
    Mr. RIVERA. [Off-mike.]
    Mr. EVANS. Hello?
    Chairwoman VELAZQUEZ. He cannot hear you.
    Mr. RIVERA. Sorry. We--I forgot what I said. We----
    Chairwoman VELAZQUEZ. Well, time has expired, if you don't 
mind. But you could answer his question.
    Mr. RIVERA. So, we process--so, if I am a small business--
you know, 41 days sounds great for me. But if I am the small-
business owner and needed money in day 5, day 10, you know, 
that is the relevant point. So, we are trying to get the job 
done as soon as possible.
    Chairwoman VELAZQUEZ. Time has expired.
    And now we recognize the gentleman from North Carolina, Mr. 
Bishop.
    Mr. BISHOP. Mr. Rivera, I am pleased to have an opportunity 
to pursue that just a little bit further. You just said 41 days 
sounds good to you. And just give me a little bit more insight. 
I am a layperson from the perspective of how you originate 
loans.
    I have heard in the course of the hearing, listening 
carefully, that you were absolved of the obligation to do some 
things. Like, getting a tax transcript in each case is not 
necessary. You have to do some things to identify people, 
confirm the identification. I get that. I don't know whether 
there might be some shortcuts. I know you have to get documents 
signed. We talked about DocuSign, and disbursing that could be 
done pretty quickly. I heard that you have the credit score, 
which is a significant piece of information.
    What else has to be done by a loan officer?
    Mr. RIVERA. The loan officer historically gets--in an 8-
hour day, they got 4 hours to review the credit. We now give 
them 15 minutes. So we have really streamlined that process. I 
think the challenge we just had was basically the sheer volume 
we have experienced.
    Mr. BISHOP. Okay, but what are they doing in the course of 
that review? For example, if you have a range of credit scores 
that are acceptable to SBA--and I am a loan officer; I don't 
need 15 minutes to look at that credit score. I am trying to 
understand what else they have to do----
    Mr. RIVERA. Okay.
    Mr. BISHOP.--to examine an application.
    Mr. RIVERA. No, I understand.
    So, 30 percent of our applications are what we call auto-
approved, and a team lead just needs to--it is an inherently 
governmental position, that a team lead needs to approve that 
application. We can't let the system do it.
    So, the other 70 percent, they just go through and they 
check the variables. They call the small business, and they 
fact-check some of these different variables.
    Mr. BISHOP. Like what?
    Mr. RIVERA. Location, address. Sometimes their bank account 
doesn't match their business name, so can you provide us 
evidence of something that shows those things connecting, from 
that perspective.
    Mr. BISHOP. Okay.
    So you said--and then help me with this part. So, if you 
said that--I think you just said a processor gets, like, 15 
minutes to look at an application. And based on the things you 
just told me about, I am not sure it takes 15 minutes, but 15 
minutes is 15 minutes. Help me understand, then, why 41 days 
sounded pretty good.
    Mr. RIVERA. Well, I am just saying, 41 days, from my 
perspective, based on the traditional goal of 15, 30, 45, 60, I 
mean, we beat the 60-day goal. My intent was not to say we are 
satisfied with 41 days.
    Mr. BISHOP. Yeah.
    Mr. RIVERA. Obviously, we want to provide the fastest 
assistance available based on the plan, the historical disaster 
plan.
    Mr. BISHOP. Yeah.
    Mr. RIVERA. That is what it is based on. And, you know, 
there is a reasonableness from a time perspective. If we could 
have done it in 15 days or 30 days, I mean, we would have done 
that.
    But the point today is, I mean, we are doing these in 5 
days right now----
    Mr. BISHOP. Yeah.
    Mr. RIVERA.--for the current queue. Going back, we have 
learned a lot.
    Mr. BISHOP. Right. And I hear you. And I think that is 
maybe the nature of the rub, if you are talking about 
expectations or people being dissatisfied. The customer is 
always right when--rule number two is, you know, refer to rule 
number one, the customer is always right.
    But I think it is hard--and even when I interact with you 
as a layperson about that origination process, I go, ``Hmm.'' 
That seems like that could get done--particularly if you are 
excused from a lot of the requirements by the legislation, you 
know. Maybe, if Congress had looked at it again, they might 
have said ``without regard to credit-worthiness,'' I don't 
know, and excused you from having to look at the credit score. 
But that doesn't seem like that takes very long. I think those 
are the things that people find difficult or frustrating.
    And the other thing, just to balance that--again, I think 
balance is appropriate. And maybe to balance Congresswoman 
Craig's comment about interacting with your congressional 
liaison, we had the opposite experience in my office. That is, 
we had a situation where someone's PPP loan, to make a 
different reference, had gone awry, not because of anything SBA 
did, but because the financial institution submitting it--there 
was a snag. And they were able very quickly to tell us that 
there was no loan. They followed up and said, ``You have to 
give us an EIN number.'' And then they researched it and came 
back, and we were able to pinpoint the problem and get it 
solved for that constituent.
    So I am sure there are differing stories, but that ought to 
always be the objective, obviously, is to respond in a 
substantive way and quickly to Members of Congress, and with 
more than just a put-off or a repetition of a previous 
statement. But appreciate, in that case, it worked for us.
    Mr. RIVERA. I understand.
    Mr. BISHOP. And any comment you have on that I would 
welcome in the 30 seconds I have left.
    Mr. RIVERA. And if you have any suggestions, we always look 
forward to any suggestion that we can work with you on ways to 
process or streamline this process. I am open.
    Mr. BISHOP. My experience was positive. Thank you, sir.
    Mr. RIVERA. Thank you.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    The gentleman from Illinois, Mr. Schneider, is recognized.
    Mr. SCHNEIDER. Thank you, Madam Chairwoman, and thank you 
for indulging us and offering a chance.
    Mr. Rivera, you mentioned some numbers for the EIDL 
Program. I just want to clarify them. Of the $300-plus billion 
that was--you know, how much has been lent out so far?
    Mr. RIVERA. As of this morning, we have loaned $132 
billion.
    Mr. SCHNEIDER. So more than $200 billion still left to 
lend?
    Mr. RIVERA. Yes, sir.
    Mr. SCHNEIDER. So, I guess, I have to go back to this 
arbitrary cap of $150,000. I know so many businesses who needed 
more, applied for more, and were told, you can't get more. What 
are they supposed to do?
    Mr. RIVERA. Well, so I think, in some situations, what we 
learned is--when you apply for a loan, we don't ask them what 
the loan amount is. We base it on 6 months of working capital. 
So, there was a little bit of a misunderstanding on the 
communication piece.
    We go back to what you have generated over the last 12 
months, based on your sales, costs of goods sold, whatever your 
gross profit margin. We took 6 months, and that is what we 
loaned----
    Mr. SCHNEIDER. You didn't cap it at $150,000?
    Mr. RIVERA. No, what I am saying is that that is the loan 
amount that was determined.
    We started at 500, but I think if we would have done 500, I 
don't know--the decision was--let me take you back. The 
decision was, we had $50 billion. You know, leveraged it seven 
times. We had 5 million applications. We could not have done a 
$500,000 loan at the time.
    So, there was a lot of analysis, whether it was 2 months of 
working capital, 4 months of working capital, 6 months, and we 
did all the variables, and the decision was made by the agency 
to move forward with the $150,000.
    Mr. SCHNEIDER. All right. So I don't do math that well--
actually, I do. But if you have lent out $100 billion, there is 
$200 billion left. That is roughly a third of the program. If I 
take $150,000, if you had done $450,000, you would have 
consumed all the money. Certainly more than $150,000.
    And I have talked to so many constituents, not an 
insignificant number, that have said, ``We needed more money. 
We have competitors who got more money than we did because they 
were earlier in the queue. We are trying to compete.''
    And, you know, the $150,000, I just want to be clear, that 
was a cap. It was a cap the SBA set. So that leaves two-thirds 
of the money still left in the program.
    Mr. RIVERA. So, I mean, I guess it is how you want to cut 
it. I mean, the average loan, $61,000--and, you know, we talked 
about 80 percent are below the $150,000. I mean, our average 
size loan for below $150,000--and I will fact-check myself--is, 
40-something-thousand dollars.
    We did have, as you are mentioning, 19 percent at the 
$150,000. So, admittedly, they would have had more eligibility 
than, you know, the $150,000. One percent are above that 
$150,000. But we have had more than 80 percent--average loan is 
$61,000.
    Mr. SCHNEIDER. Yeah. But it is like saying we are getting 
our loans out in 41 days. Sure, 80 percent is a good number, 
but that leaves 20 percent of the businesses who are getting 
just enough to get close to what they need, but close doesn't 
count it to paying the bills that they are going to have.
    Mr. RIVERA. But, remember, at the time, we also had PPP for 
payroll. So, I understand--you know, the EIDL Program has 
expanded--it is working capital; it is more than just payroll. 
So that was kind of the dovetail approach. I mean, we had two 
factors. We had, you know, the EIDL----
    Mr. SCHNEIDER. All right. So I would like to explore this 
separately----
    Mr. RIVERA. Okay.
    Mr. SCHNEIDER.--because it is a big issue, but I have a 
minute and a half left, and I want to go on to another thing.
    You know, you talked about, or you were asked earlier, how 
would you rate the program. And I don't want to rate--I know 
how hard it was, and, like I said, I know how hard everyone is 
working. And I don't mean to be critical of all the employees, 
who are literally working 24/7. And I know that and appreciate 
that.
    You know, when I did my consulting, I worked with small 
businesses. I would close the door with the management team and 
say, ``All right, let's start with a blank piece of paper. 
Forget what you have. If you could start over, what would you 
do?''
    If you could start over--we are not in a private room, so 
this is public. But if you could start over, if you could 
design this system--because we know this pandemic is going to 
last into the future--what would you do to make sure that we do 
a better job supporting America's small businesses?
    Mr. RIVERA. Well, I think we had the right approach with 
the surge contract. I mean, that is one thing that we did good. 
We probably should have had visibility in the application 
portal----
    Mr. SCHNEIDER. Okay, not looking back, but let's look 
forward. What can we, as Congress, give you to ensure--I want 
the SBA to succeed, not just to clear the threshold but to blow 
it out of the water, to be so good that people are coming back 
and saying, ``We thank God for the government because we were 
able to weather this storm, get through this pandemic, and look 
to a future to ensure that our kids and our grandkids are going 
to be prosperous.''
    Mr. RIVERA. I mean, I think we can always improve, but with 
turning a grant in 2 days and a loan in 5 days, I think that is 
pretty good service, since we had these 2 million come in, you 
know, since the portal--since the June 15 timeframe.
    Mr. SCHNEIDER. Okay.
    I am out of time, but I do want to say, Madam Chairwoman 
and Ranking Member, thank you for having this hearing. Whatever 
we can do to help the SBA succeed, count me in in doing it.
    I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    And now I recognize the gentleman from Pennsylvania, Mr. 
Evans, for a question.
    Mr. EVANS. Thank you, Madam Chairperson. Again, I thank 
you. This is very important.
    I want to go back to something you said, where applicants 
who are denied the EIDL loans are given the opportunity for 
reconsideration. Can you describe this process, and how long 
does reconsideration take?
    Mr. RIVERA. The reconsideration process is, when they 
submit information for us to determine their cash flow--I mean, 
I think it is 65, 70, 75 percent of the loans are based on a 
lower credit score, so we ask them for a copy of their tax 
transcript, or we get a copy of the tax transcript from the 
Internal Revenue Service. So that is the process.
    There are eligibility cases where somebody opened a 
business post-COVID, you know, post- that January date.
    We try to work through all these issues. We have about 
100,000 applications, I think, that are in the queue right now 
on reconsideration, and we continue to work these as fast as 
possible. It is the manual process, or it is the DCMS 2.0 
process.
    Mr. EVANS. Okay. I understand. What I want to get to, that 
part, you said ``manual.'' You know, how long does it take in 
reconsideration? Can you quantify that?
    Mr. RIVERA. Yeah. It is usually--it is taking right now--I 
mean, I don't have the statistic in front of me, and I can get 
back to you for the record. I think it is taking 2 to 3 weeks, 
on average.
    Mr. EVANS. Two to 3 weeks.
    Mr. RIVERA. Yes, sir.
    Mr. EVANS. So if an applicant is approved after 
reconsideration but if they are no funds left in the EIDL 
Program, will there be a remedy for the applicant?
    Mr. RIVERA. Well, I mean, we have a couple hundred billion 
left. So, I mean, it may at some point, but right now it is not 
an issue.
    Mr. EVANS. Okay. That is not an issue then. Right, right, 
right, right, right.
    The SBA is still processing EIDL and physical disaster loan 
applications for non-COVID disasters, such as those related to 
civil unrest, tornadoes, and flooding. Processing these loans 
as they come in, is the processing time for these applications 
still within the normal timeframe?
    Mr. RIVERA. Oh, yes, sir. I mean, we are processing these--
I think the goal right now is, like, 10 days, on average.
    We declared a couple of counties in Illinois and a couple 
of counties in southern California for civil unrest, but we 
have booked a billion dollars' worth of non-COVID disaster 
assistance this fiscal year.
    Mr. EVANS. So you have booked a billion dollars for that?
    Mr. RIVERA. I am sorry, we have approved a billion dollars' 
worth of disaster assistance across the board. These are all 
disasters. We had this earthquake down in Puerto Rico, we have 
had floods, we have had tornadoes. We have had most of those 
type of disasters.
    You know, we generally do about $1.1 billion a year. That 
is what we put in the congressional justification. So we are 
right on track, that is just the path we generally take, the 
10-year average.
    Mr. EVANS. So the two places you have, you said, were 
California and Illinois?
    Mr. RIVERA. Yes, sir. And we have a couple of----
    Mr. EVANS. Yeah----
    Mr. RIVERA. I am sorry.
    Mr. EVANS. No, go ahead. You are saying California--there 
are counties within California and Illinois you have approved 
then?
    Mr. RIVERA. Yes, sir, for civil unrest.
    Mr. EVANS. Okay----
    Mr. RIVERA. We have--I am sorry. I keep interrupting.
    We have six other, I think, pending requests that the State 
is working on assistance from. I don't have that information 
here with me, but I can get back with you for the record.
    Mr. EVANS. Yeah, I would interested, if you would relay 
that to the Chairwoman and pass that on to the Committee.
    I appreciate, you know, all you are trying to do, and I 
know it is not easy. But I appreciate the Chairwoman for having 
this hearing, because, you know, transparency and openness, as 
she has talked about, is extremely important. Because you have 
people out there, you know, who hear about it, and through no 
fault of their own--maybe the pandemic or civil unrest, neither 
one is the fault of their own.
    The execution, you can understand, is something that is 
very important. Am I correct?
    Mr. RIVERA. Oh, yes, sir. We definitely understand that.
    Mr. EVANS. Right.
    I thank you, Madam Chair, for allowing me this time, and I 
really appreciate all you have done on this, okay?
    Chairwoman VELAZQUEZ. The gentleman's time----
    Mr. EVANS. Thank you. I yield back.
    Chairwoman VELAZQUEZ. Thank you.
    Mr. Rivera, thank you again for your testimony on the SBA's 
EIDL Program and its performance in response to COVID-19.
    I understand the historic and unprecedented demand for the 
program and that it may have been challenging to process 
applications. However, it is July 1, and here we are.
    You need to improve communications with borrowers. Customer 
service, across the board, has been an issue that time and 
again has been raised, whether in hearings or phone calls 
coming in from constituents.
    Also, you need to improve SBA communications with the 
authorizing committee, both the Senate and the House. It is two 
bodies; it just can't be the Senate. You have to improve your 
communication with this Committee.
    And as Congress continue to seek ways to help businesses 
that need relief in order to survive the pandemic, I would 
implore you that you send to us any request that you consider 
is essential in order to perform your responsibility of 
providing economic relief to the businesses that we are 
supposed to serve.
    So I ask unanimous consent that members have 5 legislative 
days to submit statements and supporting materials for the 
record.
    Without objection, so ordered.
    And if there is no further business before the Committee, 
we are adjourned.
    Thank you.
    [Whereupon, at 11:58 a.m., the Committee was adjourned.]
    
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