Jaja Chen and her husband Devin Li were elated when they signed a lease for their new bubble tea shop, Cha Community. Both Asian-American immigrants (her from Taiwan, him from China), they said it was a struggle to find authentic Asian food in their new home of Waco, Texas. So they eventually decided to host a pop-up at a farmer’s market. Later, they moved on to a food truck. Finally, they opened an actual brick-and-mortar storefront where they could serve customers tea and dumplings.
That was December 2019.
Chen signed the lease and got on a plane the next day to visit family in Taiwan. While there, she began to hear “inklings of Covid.” A few months later, with the couple back in Waco readying their grand opening, pandemic shutdowns hit. Cha Community remained shut for another two months. All told, they lost about $20,000 right off the bat.
At the time, Chen decided to apply for emergency aid under a bevy of new programs being offered by the U.S. Small Business Administration. The couple applied for both a 3.75% fixed-interest loan under the Economic Injury Disaster Loan program as well as a $10,000 advance grant, getting their application in a day before it opened to the public on March 20, 2020.
After two weeks passed, they checked in with the SBA and were told the advance grant was coming, Chen said. She said they had also been approved for a $20,000 loan, but turned it down since the grant was supposedly on its way. But more than two years later, the grant still hasn’t arrived. “To this day, we have no idea what happened,” Chen said.
Chen is one of hundreds of small business owners who say they’ve been waiting the better part of two years for help from the SBA. In a new survey released Thursday by the Small Business Majority, a national network of small businesses and community organizations, about one-third of 201 small business owners polled who applied for an EID loan said they never got an answer, or any money, from the SBA.
And now the SBA says funding for the program is likely to run out in the next few days.
As part of the federal government’s initial response to Covid-19 and the sudden stop experienced by the U.S. economy during the first lockdown, the SBA was tasked with rolling out relief for businesses of many sizes. The EIDL program actually predated the pandemic, albeit on a much smaller scale (it disbursed $3.6 billion in disaster loans in 2018 compared to more than $369 billion over the past few years).
The agency quickly ran into problems, said Brian Pifer, vice president of programs and research at the Small Business Majority. The pandemic required “a huge ramp up for the agency on a national scale,” he said. The agency had “a capacity and staffing issue” so small businesses “just kind of fell through the cracks.”
In a statement, the SBA didn’t address complaints by small business owners who say they never received a determination on loan or grant applications. The agency said it increased capacity for processing pandemic-related EIDL loans and accelerated the rate at which application decisions were made. The agency also said that a backlog of more than 600,000 loan increase applications has been cleared.
During the pandemic, the SBA has also raised the cap on EID loans, allowing businesses to apply for an increase of up to $500,000. But of the respondents to the Small Business Majority survey, almost one-third of those who applied for an increase said they haven’t heard anything yet. And of that group, almost one-third said they’ve been waiting more than a year.