Small Business Administration: Disaster Loan Program Changes


September 27, 2021

The Honorable Ben Cardin
The Honorable Rand Paul

Ranking Member
Committee on Compact Small business and Entrepreneurship
United States Senate

The Honorable Nydia M. Velázquez
The Honorable Blaine Luetkemeyer
Ranking Member
Committee on Small Company
Dwelling of Associates

Topic:  Modest Business Administration: Disaster Personal loan Program Variations

Pursuant to portion 801(a)(2)(A) of title 5, United States Code, this is our report on a big rule promulgated by the Tiny Company Administration (SBA) entitled “Disaster Financial loan Application Changes” (RIN:  3245-AH80).  We gained the rule on September 10, 2021.  It was posted in the Federal Sign up as an interim closing rule on September 8, 2021.  86 Fed. Reg. 50214.  The efficient date is September 8, 2021.

SBA mentioned that the interim ultimate rule implements alterations to the Disaster Mortgage Method rules.  Specifically, SBA stated that for programs for COVID-19 Financial Injuries Disaster (COVID EIDL) loans, the rule is changing the definition of affiliation, the qualified uses of bank loan proceeds, and software of the dimension common to specified tricky-strike suitable entities, and is establishing a greatest personal loan restrict for borrowers in a one corporate team.  In addition, in accordance to SBA, for all catastrophe aid packages, SBA is switching which SBA official may possibly make the conclusion on the attractiveness of an application that has been declined for a 2nd time.

The Congressional Overview Act (CRA) demands a 60-day delay in the efficient date of a significant rule from the date of publication in the Federal Register or receipt of the rule by Congress, whichever is later.  5 U.S.C. § 801(a)(3)(A).  The 60-working day hold off in effective date can be waived, having said that, if the agency finds for excellent induce that delay is impracticable, avoidable, or opposite to the general public fascination, and the agency incorporates a assertion of the results and its explanations in the rule issued.  5 U.S.C. § 808(2).  SBA said that, for great result in, it identified a 60-day delay is impractical and not in the general public curiosity.  According to SBA, an quick helpful date will give compact enterprises, nonprofit corporations, competent agricultural companies, and unbiased contractors impacted by the interim ultimate rule the optimum amount of money of time to use for loans and SBA the optimum volume of time to course of action programs prior to the software finishes on December 31, 2021. 

SBA also stated that it established there is very good result in for dispensing with progress community detect and remark under the Administrative Technique Act on the grounds that it would be impracticable and opposite to the general public curiosity.  5 U.S.C. § 553(b)(3)(B).  According to SBA, the intent of the statutory COVID economical assistance programs, like the COVID EIDL system, is that SBA presents reduction to America’s small firms expeditiously.  SBA even more said that the continuing lessen in financial activity in vital economic sectors as in contrast to 2019 and the re-imposition of mask prerequisites and other general public-wellbeing steps throughout the nation mainly because of the variants (such as Delta) of COVID-19, gives very good induce for SBA to dispense with advance recognize and remark rulemaking, which would get months.

Enclosed is our assessment of SBA’s compliance with the procedural techniques expected by portion 801(a)(1)(B)(i) via (iv) of title 5 with regard to the rule.  If you have any questions about this report or desire to get hold of GAO officials liable for the analysis perform relating to the matter make a difference of the rule, make sure you make contact with Shari Brewster, Assistant Basic Counsel, at (202) 512-6398.

Shirley A. Jones
Running Affiliate Normal Counsel


cc:  Yvonne Walters
  Attorney Advisor, Business office of Standard Counsel
  Modest Small business Administration


REPORT Under 5 U.S.C. § 801(a)(2)(A) ON A Important RULE
“DISASTER Bank loan Software CHANGES”
(RIN:  3245-AH80)

(i) Charge-benefit analysis

In its submission to us, the Tiny Enterprise Administration (SBA) indicated that it did not put together an investigation of the expenses and positive aspects of this interim last rule.

(ii) Company actions suitable to the Regulatory Adaptability Act (RFA), 5 U.S.C. §§ 603-605, 607, and 609

SBA determined that given that this last rule is exempt from recognize and comment, SBA is not necessary to conduct a regulatory flexibility examination.

(iii) Company actions applicable to sections 202-205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. §§ 1532-1535

In its submission to us, SBA indicated that it regarded as planning of a created assertion below the Act to be not relevant.

(iv) Other related details or requirements under acts and govt orders

Administrative Course of action Act, 5 U.S.C. §§ 551 et seq.

SBA mentioned that it identified there is great lead to to difficulty this interim final rule with out advance observe and general public remark simply because performing so would be impracticable, avoidable, and contrary to the general public interest.  SBA stated that other SBA COVID-19 aid applications have lately finished or fatigued the funding delivered for the software, however businesses and nonprofit corporations are continue to in will need of help.  SBA further states that an rapid productive day will give compact businesses, nonprofit companies, certified agricultural enterprises, and unbiased contractors influenced by this interim closing rule the maximum sum of time to apply for loans and SBA the optimum total of time to system programs ahead of the application ends on December 31, 2021.  In accordance to SBA, offered the limited period of this plan, SBA has established that it is impractical and not in the community desire to present a delayed effective day.

Paperwork Reduction Act (PRA), 44 U.S.C. §§ 3501-3520

SBA determined that this interim closing rule will demand revisions to the COVID-19 Economic Injury Disaster Personal loan Application facts selection, Business office of Administration and Spending budget (OMB) Command Quantity 3245-0406.  SBA mentioned it has obtained crisis approval of the revisions, which includes waiver of public remark notices.

Statutory authorization for the rule

SBA promulgated this interim last rule pursuant to numerous sections of title 15, United States Code, sections 1110 and 1114 of Community Law 116-136, and section 331 of General public Regulation 116-260.

Govt Order No. 12866 (Regulatory Arranging and Evaluate)

SBA mentioned that OMB has established that this interim ultimate rule is economically considerable less than the Order.  SBA said it is continuing beneath an emergency provision of the Get primarily based on the want to shift expeditiously to mitigate the recent financial hardships and situations arising from the COVID-19 crisis.

Executive Purchase No. 13132 (Federalism)

SBA decided that this interim ultimate rule will not have significant direct consequences on the states, on the romantic relationship between the nationwide federal government and the states, or on the distribution of electrical power and tasks among the numerous layers of governing administration.  Therefore, SBA determined that the rule has no federalism implications warranting planning of a federalism evaluation.