Rep. Garbarino Calls on SBA to Amend Disaster Loan Requirements to Better Serve Small Businesses

WASHINGTON - This week, Congressman Andrew R. Garbarino wrote a letter to the Administrator of the Small Business Administration (SBA) requesting that the SBA amend the eligibility requirements of Economic Injury Disaster Loan (EIDL) targeted advance applicants.

"As a third-generation small business owner and member of the House Committee on Small Business, I know firsthand that small businesses are the backbone of the Long Island economy," Rep. Garbarino wrote in the letter. "The livelihood of so many hardworking Long Islanders are bound to small businesses, and owners have felt some of the most severe negative impacts of the COVID-19 pandemic. From onerous state and local shutdown orders to overreaching capacity restrictions, small businesses were forced to alter how they operated and serviced customers. Now that relief has arrived, many of our most vulnerable communities are not able to receive critical advances on funding due to a flawed definition from SBA."

The full text of the letter can be found here and below. 

Dear Administrator Guzman,

I write to you today to respectfully ask the Small Business Administration (SBA) to amend eligibility requirements of Economic Injury Disaster Loan (EIDL) targeted advance applicants. Specifically, we ask that applicants who reside in “low-income communities” as defined by the Internal Revenue Code may be granted a targeted advance, even if their business falls outside a defined low-income community.

As a third-generation small business owner and member of the House Committee on Small Business, I know firsthand that small businesses are the backbone of the Long Island economy. The livelihood of so many hardworking Long Islanders are bound to small businesses, and owners have felt some of the most severe negative impacts of the COVID-19 pandemic. From onerous state and local shutdown orders to overreaching capacity restrictions, small businesses were forced to alter how they operated and serviced customers. Now that relief has arrived, many of our most vulnerable communities are not able to receive critical advances on funding due to a flawed definition from SBA.

As you may know, SBA requires that applicants eligible for an EIDL targeted advance must have their business’ physical address within a “low-income community” as defined by section 45D(e) of the Internal Revenue Code. Low-income community borders are defined by land tracts developed by the U.S. Census Bureau. Due to Long Island’s high cost of living, low-income communities in our district are often defined as any population tract where median family income for such tract does not exceed 80% of the greater of statewide median family income. My district’s most vulnerable communities are placed in primarily residential tracts just outside of their centers for small business activity.

Long Island’s small businesses often operate in strip malls or industrial parks that are adjacent, but not included in low-income population tracts. We have identified multiple centers for small business activity in Bay Shore, Brentwood, Central Islip, and Copiague, that fall right outside targeted borders. Many small business owners who live in targeted tracts are forced to watch their competitors across the street receive funding while they are in turn forced to close. These reports are both heartbreaking and frustrating. We cannot fail to serve the small businesses that keep our vulnerable communities prosperous. We ask that you consider expanding the EIDL’s business address requirement to include the residential addresses for applicants living in these low-income communities.

Congress passed the Economic Aid Act this past December with the intent to provide relief to the struggling small businesses in our communities. The EIDL program provides small business owners with critical advances to pay expenses and survive the shortfalls caused by the COVID-19 pandemic. I urge you to reconsider your interpretation of this definition along with the economic impact of exclusion, and to ultimately take corrective action. Thank you for your attention and consideration of this request.

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