By Eliza Joyner
The Senate Small Business Committee held the nomination hearing of Isabel Guzman last week to be the next Small Business Administration (SBA) Administrator. Guzman is no stranger to the SBA or small business ecosystem. She served as Senior Advisor and Deputy Chief of Staff during the Obama Administration and has since served as California’s Small Business Advocate.
Committee Chair Ben Cardin (D-MD) began the hearing by highlighting the urgent need for strong leadership at the SBA. It is no secret that the SBA has played a monumental role in the fight against COVID-19. If confirmed, Guzman will be entering the agency during a pivotal time, as the SBA rolls out the second round of the Paycheck Protection Program (PPP) and additional Economic Injury Disaster Loan Program (EIDL) grants. As such a large undertaking, there was much controversy surrounding the first round of the PPP, primarily focused on the disparity of loan disbursement among minority communities and lack of data transparency from the SBA. In her testimony, Guzman assured the Committee that she would serve as a voice for all small businesses while championing diversity and support of minority businesses.
There was a range of concerns raised by members of the Committee, but the persistent topic of discussion remained on how to better serve minority-owned small businesses. Chair Cardin and Senators Coons (D-DE) and Hirono (D-HI), reiterated the need for targeted outreach to minority communities through community-based lenders like CDFI’s, as well as financial education and technical training to make the programs more accessible. All members of the Committee appeared hopeful about the second round of the PPP and EIDL advances, many referencing newly added subsidies, such as the Shuttered Venue Operators Grants. These grants provide aid to small businesses in the entertainment industry that do not fit within the parameters of the PPP. Senators Shaheen (D-NH) and Ernst (R-IA) asked Guzman how she planned to get the program running, and how she was going to maintain its tenure. Guzman promised that Shuttered Venue Operators Grants would be a top priority of hers, and that she would work with her team to make sure they were administered effectively.
Another common theme amongst the Committee was the issue of data transparency, specifically concerning the first round of the PPP. Chair Cardin, and Senator Shaheen, spoke to the importance of communication between the agency and the Committee. They asked Guzman if she would be committed to active, open communication between the agency and the Committee. Guzman promised to work with her staff and the Committee to ensure that all SBA programs and relationships remained strong and effective.
There was also bipartisan concern over the exclusion of convicted criminals’ ability to access SBA loan programs. In the first round, people convicted of non-economic crimes were prohibited from accessing the loans if they had been convicted within the last five years. Following fierce pushback, this rule was reduced to one year. Nonetheless, Senators Booker (D-NJ) and Scott (R-SC) argued that the existence of this rule at all is unjust. Both senators urged Guzman to consider repealing it entirely.
A departure from the usual tone of bipartisanship was the issue of Affiliation Standards in the PPP. Republican Senators Ernst and Hawley (R-MO) took issue with Planned Parenthood receiving PPP funds, arguing that the organization did not fit the criteria for consideration. While both sides agreed on the need for clarification, Hawley pressed Guzman, asking her to commit to the rules outlined in the CARES Act and to promise that Planned Parenthood would not receive any more funding. Guzman agreed to uphold the rules of the CARES Act but did not comment on the Planned Parenthood case specifically. Note that her predecessor Jovita Carranza took the same stance in an oversight hearing last year on PPP, saying she could not comment publicly on any one borrower.
Overall, there was obvious bipartisan support for the nomination of Ms. Guzman, with most Democrats and Republicans offering congratulations on her nomination. Although she kept her responses short, she highlighted the focus of equity in the new Biden Administration. If confirmed, she will certainly bring minority businesses to the forefront of consideration and appears eager to access all the systems and technology available to her.
