(Bloomberg) -- A program operated by the U.S. Small Business Administration has sent the largest share of its disaster loans and grants to California, according to a partial accounting that the agency released Tuesday.
The Economic Injury Disaster Loan program, or EIDL, ran out of money last week with many firms waiting for help. Congress is considering replenishing the program, which is designed to provide loans of as much as $2 million and grants of as much as $10,000 to help small business survive the pandemic.
On Tuesday, the SBA reported on roughly $5.6 billion in coronavirus-related disaster loans and $3.3 billion in grants approved under the program so far.
That partial tally showed that small businesses in California have gotten the most in loans at $1.5 billion, or about $38 per state resident, twice the national average. California and a handful of other states benefited because their governors were quicker to make their states eligible by declaring disasters in mid-March. Those states’ advantage persisted into April, the data show.
California firms also got the most in disaster grants processed so far at $484.6 million, followed by Texas at $287.7 million and Florida at $272.7 million, according to the data.
In all, Congress had appropriated $10 billion for the grant fund and $7 billion for the loans; the SBA announced last week that it stopped accepting applications when those funds were tapped out.
The White House and congressional leaders struck a deal for a new $484 billion relief plan that the Senate approved on Tuesday. The measure, which could clear the House later this week, includes $60 billion for additional EIDL loans and grants. It would also provide more funding for the separate and much larger Paycheck Protection Program relief initiative for small businesses, which also ran out of money last week.
The SBA reported approving 26,919 EIDL loans for almost $5.6 billion and 755,476 grants processed for $3.3 billion. The agency has not disclosed how many applications it has received for loans and grants, but Senator Ben Cardin, the top Democrat on the Committee on Small Business & Entrepreneurship, said in an April 9 speech there had been millions of requests.
Business owners have complained about not getting answers or money from the EIDL program. While firms are starting to report that they’re receiving funds, initial loan amounts have been limited to $15,000 because of demand. Also, some owners expected $10,000 grants only to be told they’d receive $1,000 per employee.
And while the law said the advances would be processed within three days, it’s taken much longer in many cases.
About 40% of National Federation of Independent Business members surveyed reported applying for an EIDL loan, but only 1% had received proceeds as of April 17. Of those who applied for EIDL loans, 77% also requested an emergency grant, but only 10% had received money, NFIB said.
Ben Koren, who sought an EIDL grant for Go Big, his wellness-energy shot company, heard nothing for weeks, he said. Then he received an April 14 email from the SBA: Instead of a $10,000 grant, his company would receive $1,000 per employee -- $4,000 in his case.
“I used to be an investment banker and I have an MBA from Columbia, and I find the whole thing extremely confusing,” Koren said. “I can’t imagine how this process must be for the average person who relies on an accountant to do their books.”
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