Janita R. Stewart, district director of the Small Business Administration’s Mississippi district office, responded promptly to requests for contact, but admitted that the SBA’s statewide offices provided only “backup support” for the EIDL program.
Over the course of several months in late 2021 and early 2022, the Mississippi Free Press reached out to the Small Business Administration for interviews on the EIDL program and the targeted advances with two major lines of inquiry. First, what could interested parties do to clarify where their applications were in the intricate process of acceptance, reconsideration and funds disbursement? Could people like Mask, Butler and Edwards have done anything differently to receive their money earlier? What could they do now?
Second, how had the process, which was intended to address the economic shock of the pandemic’s sudden onset, dragged out into an unresolved frustration for so many small-business owners? Years later, why were so many who had been approved early left to languish for so long? Had the agency been starved of resources in a time when it needed more support? Had technical failings in the constellation of financial systems needed to deliver the critical support prevented their delivery?
Thousands of small-business owners regularly congregate on online forums to discuss the painful opacity of the Small Business Administration’s financial assistance programs.
In these attempts this reporter experienced small parts of the opacity and frustration that the small-business owners interviewed for this story experienced. The SBA variously ignored or declined most attempts at contact, and occasionally promised longer conversations on the topic that rarely materialized.
Perhaps the most important insight into the difficulty many had in finding answers was that the closest offices of the SBA—like those in Mississippi itself—were largely uninvolved in the EIDL program, unable to offer serious insight into the workings of the system. The Mississippi SBA, at least, was prompt with its responses.
Janita R. Stewart, district director of the SBA’s Mississippi district office, returned a request for an interview on the topic with a pair of emailed statements.
“The SBA’s COVID EIDL program is managed by the SBA’s Office of Capital Access (OCA), HQ in Washington, DC,” Stewart wrote. “SBA district offices like the SBA Mississippi District Office and all others throughout the country, merely serve as a support system to OCA for this particular program.”
The Mississippi Free Press pushed for more information. For the countless Mississippians still muddling through the obscure process, was there no more clarity available? Stewart again declined an interview.
“Unfortunately, we do not have any further information to share or provide at this time concerning COVID EIDL applicants that have applications remaining in the system awaiting to be finalized,” she wrote. “Our district office, as is the case with other district offices throughout the country, continues to provide only backup support to the Office of Capital Access in HQ which manages and administers this program.”
This reporter then reached out directly to the Office of Capital Access, requesting an interview with anyone from this central branch of the SBA capable of answering the same questions. After several attempts via phone calls and emails, Lola Kress, regional communications director at the SBA, told the Mississippi Free Press that an interview was “not possible at this time.”
Kress did respond to some of the MFP’s questions—which the Mississippi Free Press allowed to be emailed despite our person-only interview policy in order to get answers for desperate business owners—with a brief statement from “a team” in the SBA’s press office. This reporter asked how many backlogged requests the SBA faced on a day-to-day basis. “This changes each day as requests for increases, reconsideration, and appeals come in each day,” the statement read, “but in general the inventory continues to be managed in a way to avoid any backlog. There has been no backlog since the summer of 2021 where it was closed out.”
When this reporter shared that information with Mask, he was astounded. Both in his own personal experience and in the testimony of many on forums like r/EIDL, stories of staggeringly long delays and reconsiderations abound, even now in mid-2022.
Janita R. Stewart, district director of the Small Business Administration’s Mississippi district office, responded promptly to requests for contact, but admitted that the SBA’s statewide offices provided only “backup support” for the EIDL program.
Seeking additional clarification, the Mississippi Free Press reached out yet again, attempting to find someone at some level of the SBA’s broad hierarchy who could speak openly on the program. Eventually, on March 21, 2022, Rhonda Fisher, supervisory lender relations specialist, responded to a request for contact with a hopeful message indicating that someone might be reaching out soon.
“I just wanted to reach out to you this morning to let you know that we are attempting to put you in touch with a representative to discuss COVID EIDL and will let you know once we have the contact,” Fisher wrote.
The Mississippi Free Press never received that call.
Photo courtesy Bryn Bagwell
Bryn Bagwell, director of lending for Communities Unlimited, told the Mississippi Free Press that the SBA was never properly supported to handle the load of the pandemic support programs.
A Flawed Design
Bryn Bagwell told the Mississippi Free Press that the role of Communities Unlimited has always been to address the needs of businesses that usually would not qualify for bank loans. During the pandemic, that role included engaging with many business owners who were struggling to secure SBA loans and advances.
“We had to be very responsive to our existing borrowers,” Bagwell said. “Once the pandemic hit, it slowed down their ability to provide products and services. We provided grace (periods) with payments, modifications of their loan terms, and quick turnaround loans.” These “reboot” loans, she said, helped kickstart businesses that had otherwise completely sputtered out during the pandemic freeze.
Communities Unlimited also served as an SBA microlender. That role—addressing the modest but still significant needs of truly small businesses—was critical for many. “You’ll see a lot of the larger banks talk about how many dollars they got out. We like to talk about how many businesses we helped,” Bagwell said.
Sometimes the loan is small. “I think our smallest loan was $790,” she recalled. “There is no bank who would put forth all the time and effort to get a small business that size of a loan. But it mattered to that small business.”
Bagwell has sympathy for the SBA, beleaguered by a tsunami of extreme need unlike anything it had ever faced before. But she also encountered countless stories of the glacial gridlock facing small operators like Mask, Edwards and Butler.
“The process was cumbersome,” Bagwell said. “The SBA was not equipped with the technology to handle this big lift of applications for a brand new program that had (these) requirements. They just weren’t. So they did the best they could.”
The crush that had hit all of the businesses was washing over the SBA, too. “They didn’t have the people,” Bagwell added. “Plus, with COVID, they had trouble getting people hired.”
The many delays and denials that plagued the drawn-out process made the SBA the proximate cause of frustration for small business owners on the ground. But Bagwell highlighted the role that Congress played in dumping such an enormous task on the agency.
“The SBA was trying to use a newly designed system—they’d receive instructions and be told ‘we’ll send you more later, these are just temporary.’ And then they’d receive more instructions, and they’d still be temporary,” she said. “Legislators provided very little clarification about what the legislative intent was. (Disbursing billions of funds) just wasn’t as simple as (lawmakers) thought it would be.”
That “newly designed system” is not merely a metaphor, but a constellation of highly technical databases and programs. This patchwork, Bagwell said, was a constant source of confusion, the origin of much of the gridlock that left applicants and their small businesses out of the loop.
When the SBA first made PPP money available to the public, their systems cratered from the overwhelming demand, locking even banking institutions out of the program for days. Even when the system came back online, Bagwell admitted, often the process was so labyrinthine that different parts of the agency could have diametrically opposite information for lenders and borrowers.
“We were discouraged at the end of the PPP program because, apparently, they ran out of money without telling us that they did. So we were going in every hour, every two hours, checking on the applications that we had without decisions,” Bagwell said.
Bryn Bagwell, director of lending for Communities Unlimited, told the Mississippi Free Press that the SBA was never properly supported to handle the load of the pandemic support programs. Photo courtesy Bryn Bagwell
“For one month, we checked and checked and we called and we emailed, trying to find out why the applications had not been decisioned. Finally, after 30 days, they said ‘we ran out of money.’ We asked how they couldn’t have known that. Why keep telling us we’re working on it for 30 days?” Bagwell asked.
“There’s two different systems, not talking to each other, all trying to tabulate a big volume toward the end of the funds. They ran out of funds before the actual deadline to apply. We didn’t know it. Nobody knew it,” she said.
The borrowers who had been desperately waiting for the funds were left in the cold. “We had these borrowers who we effectively lied to for one month because the SBA … had erroneous information,” Bagwell concluded. Communities Unlimited ensured that the borrowers in question received extremely low-interest loans.
Confounding moments like this continued even for organizations, themselves lenders, who were expertly equipped to navigate the complex realm of federal loans and financial systems. For individuals seeking EIDL loans and advances without the assistance of professionals like Bagwell, the process was entirely opaque.
‘Who’s Holding These People Accountable?’
None of the interview subjects seemed the least bit surprised when this reporter shared the flimsy results of attempts to request clarity from the SBA. Contradictions or outright silence, they agreed, were the usual results of attempts to discuss the subject with the agency at all levels.
“What is so frustrating is that you can’t even find out where you are in the process,” Edwards said. “So the burden is on you to repeatedly check and check and check and check.”
Even in his frustration, Butler expressed empathy for the ground-level employees and call-center workers who had to field so many requests for information.
One shared experience united Butler, Mask and Edwards, and indeed many of the other small business owners who continue to struggle with the process. Somewhere between application and final delivery of the funds, some singular error seemed to warp the entire system. What should have been minor clerical mixups, either on the part of the likely overworked SBA staff, subcontractors, or from the applicants themselves, led not to weeks of delays, but often years.
But the name of the program is the Economic Injury Disaster Loan, specifically intended to deal with mass disruption, Butler said. “If you are in a disaster,” Butler asked, “should one mix-up be enough to collapse the entire goddamn system?”
‘Not All People Are Lucky Like Me’
Eventually, Butler and Edwards saw movement on their applications, possibly on track to see some benefit, even if it came years after the onset of the pandemic. Butler received his funding in 2022, and he’s glad to be done with it. Above all else, he is grateful for the privilege and support that kept him afloat before it arrived.
“I’m lucky,” Butler said. “But not all people are lucky like me. People have real life needs every single day. Not wants, needs. And they have to deal with this for a year or a year and a half or whatnot. I feel for them. The entire system just completely rolled over them.”
Edwards was not so lucky. After nearly two full years of contradictions and scattered communication, he received his final denial for the EIDL loan on March 14, 2022. The final denial, Edwards said, was based on a loan officer’s inability to locate his 2018 tax returns, something Edwards says he actively has in his possession.
But he’s done fighting with the agency.
“Luckily,” he said, “I started exploring some other options.” That’s when he found Communities Unlimited. He got the loan his business needed, and credits the organization with helping him stay afloat. “I’m actually glad that I got that instead. The rate is a little bit lower, and it comes with a whole financial team. Their job is actually to help.”
Edwards, armed with tenacity and meaningful financial support, is finally back on track. The People’s Cup is opening at last. “Our grand opening is going to be in September,” he said, voice buoyant. It was a brief, strange delay: only two years and some change.
He knows how easily things could have gone the other way. Many are coming through the late pandemic years having lost much.
Mask is one of those people. He has given up trying to protest the denials, to struggle through a system that was supposed to prop up a now dead business. When the Mississippi Free Press first spoke with him in 2021, he wanted answers and a resolution to his application. Now he seems hungry for at least accountability.
And he wants his story told. From the depths of misery, Mask says he’s endured. He wants others to know that they are not alone, and that they can find help even if it seems inaccessible at times.
“I went and I got myself into therapy, which is not something I wanted to do. My idea of what therapy was was completely off,” he admits. “I thought, ‘how are you going to tell me what’s going on with me better than I can tell myself?’”
But after coming so close to taking his own life, Mask said, he relented, and found the experience to be far more meaningful than he’d imagined. “But what it actually did is it allowed me to vent, to talk it out. It gave me different perspectives, it allowed me to work through it myself.”
Now, Mask said, he’s putting his life back together. He’s gone back into business with a close friend. His headspace is much healthier. But he knows that disaster will come again, if not for him then for someone else, somewhere in the nation.
“It’s just that there are no answers,” Mask admitted. “Who’s holding these people accountable? I’m sure if this has happened to me, I can only imagine the others. People who must be in even worse circumstances.”