Congressman slams Small Business Administration

WCNC Charlotte identified multiple small business owners improperly denied thousands of dollars in federal pandemic assistance.

CHARLOTTE, N.C. — Federal records reveal up to nearly a quarter-million small business owners have asked the Small Business Administration to reconsider the agency’s denial of their Targeted EIDL Advance applications.

Rep. Patrick McHenry (R), NC-10, the top Republican on the House Financial Services Committee, believes EIDL is a “failed federal program.”

“The Small Business Administration is a mess and the EIDL program is a disaster,” Rep. McHenry said. “I’m concerned about it as an American. I’m concerned about it as a policymaker.”

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A WCNC Charlotte investigation previously found the SBA invited businesses to apply for pandemic grants, better known as Targeted EIDL Advances, but then improperly denied many of their applications. It claimed some owed child support, weren’t citizens and weren’t even alive.

While WCNC Charlotte has helped some business owners recover their money, others like Bobby McKnight-Harrison continue to wait for an appeal decision.

“I’ve been trying to reach the SBA for months,” the Charlotte small business owner and new dad said. “I’m definitely frustrated, but I got other things to handle right now. I’ve got a business to run. I’ve got to keep everything afloat. I have a son to worry about.”

SBA cited multiple reasons for denying McKnight-Harrison in an April letter, including that he’s not a U.S. citizen. Beyond that, the agency concluded his business isn’t eligible because of its location and because he failed to substantiate an economic loss of more than 30%. In addition, the SBA said there was unverifiable information that caused the agency to question part of his application.

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He quickly appealed his decision in an email to [email protected], the appropriate email address to request a reevaluation. The SBA has yet to reveal just how many appeals people have filed. However, in response to WCNC Charlotte’s Freedom of Information Act request, the agency confirmed the reevaluation email address had received 243,880 emails through July 7, 2021.

“They’ve made huge mistakes and now you have small businesses that deserve and meet the criteria for these EIDL loans that are being left out because of the obvious mismanagement of the SBA,” Rep. McHenry said. “EIDL is an absolute unadulterated disaster of a program.”

Rep. McHenry said the program is living up to its name, sitting idle for too many businesses in need. The longtime congressman said not only is his office fighting for small business owners on a case-by-case basis, but he’s also pushing for systemic changes. This includes those outlined in a recent Government Accountability Office report meant to clear up confusion and uncertainty. In addition, Rep. McHenry said he’s telling anyone who will listen to apply for a forgivable Paycheck Protection Program loan instead.

“I’m encouraging constituents to go any other route than to deal with the disaster that is the EIDL Loan program,” he said.

WCNC Charlotte is always asking “where’s the money?” If you need help, reach out to the Defenders team by emailing [email protected].

When WCNC Charlotte questioned a senior SBA official about improper denials, the agency did not accept the blame. Instead, the top SBA official said, generally, the denials are the result of business owners checking a wrong box on the application. He recommended applicants take their time and read the eligibility information carefully before filling out an application.

“It’s the arrogance of federal officials and it’s the arrogance of the people running the Small Business Administration,” Rep. McHenry said of the agency’s response.

Back at McKnight-Harrison’s place, the business owner has tried to clear up confusion on his application, including a minor error he made about his address. He first tried through the formal appeals process, then through WCNC Charlotte’s direct contact with the SBA and most recently, through Sen. Thom Tillis. McKnight-Harrison shared WCNC Charlotte’s original investigation with the senator’s office. A representative for the senator has since reached out to the SBA on his behalf.

“Senator Tillis is aware of the issue surrounding grants from the SBA and is talking with the Biden Administration to get this issue resolved,” spokesperson Lauren Scott told WCNC Charlotte in June.

Contact Nate Morabito at [email protected] and follow him on FacebookTwitter and Instagram.

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