On Saturday, May 7, 2022, The Small Business Administration AKA SBA sent an email that reads like this:
Dear COVID EIDL Borrower:
ALL COVID-19 EIDL FUNDS HAVE BEEN EXHAUSTED
You are receiving this message as a notification that we are unable to continue processing your application due to the lack of available funding for the COVID-19 EIDL loan program. SBA is no longer processing COVID-19 EIDL loan increase requests or requests for reconsideration of previously declined loan applications under this program.
We recognize this has been a challenging time for your business and for the nation. The SBA has local offices in your community which can refer you to resources that may be able to assist your business in other ways. For more information on these services, please go to www.sba.gov/local-assistance to locate the email address and phone number for the nearest SBA district office and/or SBA resource partner. Please call or email for a virtual appointment.
ALL COVID EIDL BORROWERS – DOWNLOAD LOAN DOCUMENTS BY MAY 16
Your access to the RAPID COVID EIDL portal ends on May 16, 2022.
After receiving the initial $20,000 from the Economic Injury Disaster Loan Program August of 2020, the EIDL program minders started a calculated effort to discredit ZENNIE62MEDIA, INC., based only on ideas that proved the people working for the Small Business Administration did not at all understand what an online business does, of any kind.
October of that year, I received an email communication from Small Business Administration lawyer Jim Acheson asking for corporate documents that prove ZENNIE62MEDIA exists. I was only too happy to send them, but I then called him to ask what was behind the request. Jim Acheson told me that someone in the SBA had the idea that ZENNIE62MEDIA didn’t exist only because “You have two URLs associated with it.” In other words, the firm owns a number of domain addresses, and for reasons of name security. But to assume that a firm is not real only on that basis is incorrect and really totally nuts. Fortunately, Mr. Acheson agreed, but he would not at all tell me who it was that had the crazy idea.
All one has to do to confirm ZENNIE62MEDIA exists is visit the Delaware Secretary of State website and type the firm’s name in the field. It will show the firm’s file number, and, for $20, you can learn that ZENNIE62MEDIA, INC is a firm in what’s called “good standing” with fees paid to date. ZENNIE62MEDIA is a c-corporation just like many tech startups, from Facebook to Google, and which also have selected Delaware as the place to establish their corporate structure. As Davis Wright Tremaine LLP explained “Nearly 1.4 million legal entities are incorporated in Delaware (including over two-thirds of Fortune 500 companies), and approximately 80 percent of U.S.-based initial public offerings choose the state as their corporate home. As a result, there is broad familiarity with Delaware law among many companies, investors, and attorneys.”
But what’s shocking is that the Small Business Administration people didn’t even know to use the Delaware website to check out ZENNIE62MEDIA! That set in motion a constant set of out-right lies (in my opinion and evidence) told to me about the chance of landing a needed EIDL Loan increase. That opportunity presented itself in October of 2020, yet the SBA kept sending me to a “portal” that focused on my original $20,000 loan, and then said that my request for an increase was denied, and that they would send an email explaining the reason. That email not only never came, the SBA kept sending me emails asking me to sign up for the increase. So, when I would – a total of six times – I would get an email that was supposed to refer to a new application number and portal. Even to the point of SBA officials telling me my link to the “new portal” was sent. But when I would check the link, it just put me back to the old portal, which by March of 2022, was the same one that I used in August of 2020 and through October of 2020.
If that makes you dizzy, imagine dealing with that for 2 years! Then, about two months ago, I got an SBA representative who figured out the problem. The new portal was under the wrong email supposedly associated with my company, but actually incorrect. When the SBA representative said he would use a new email, another SBA representative then said, on another call, that they would keep using the old and wrong email. He never explained why that was the case.
So, as far as I am concerned, the SBA has gotten away with murder of my expectations to receive help. The Biden Administration has not fixed the EIDL problems, and an internal study revealed that contracts given to firms to work on the EIDL Program were done without regard to standard diversity requirements. On top of that, the main firm was owned by Rocket Mortgage, who’s owner Dan Gilbert was a major donor to the Trump Campaign.
Called “SBA OIG Report 22-10: Evaluation of SBA’s Disaster Assistance Loan Recommendation Services”, the report said this:
To quickly award loans during the COVID-19 economic crisis, SBA relied on an earlier 2018 contract but did not follow the proper procedures to ensure that contract provided the best value to the government. SBA awarded the contract for data analysis and loan recommendation services without adequately ensuring the contract prices were fair and reasonable in accordance with Federal Acquisition Regulation and agency policy.
SBA’s needs had changed significantly from the 2018 disaster loan contract to the requirements for processing COVID-19 EIDLs, and those changes were not fully taken into consideration when awarding following contracts. As a result, there is no assurance that the rates SBA paid for services under the data analysis and loan recommendation contract were fair and reasonable.
SBA also did not ensure the contractor complied with established size standards to be eligible for a small business set-aside award. In addition, SBA did not ensure the contractor complied with subcontracting limitations, exceeding the limit by $13 million. These awards are intended to help small businesses compete and win government contracts. Instead, the COVID-19 contract was noncompetitively awarded and largely performed by an affiliate of one of the nation’s largest mortgage lenders.
We made six recommendations to strengthen SBA’s procurement policies and enhance controls to ensure compliance with SBA’s contracting program requirements. SBA agreed or partially agreed with all six recommendations.
But it’s not reported that the Inspector General followed up on the implementation of those recommendations. But even more horrifying, is this: “Instead, the COVID-19 contract was noncompetitively awarded and largely performed by an affiliate of one of the nation’s largest mortgage lenders.” Full report here.
That firm was Rapid Financial Services, which is an affiliate of Rocket Mortgage, owned by Dan Gilbert, the billionaire owner of the Cleveland Cavaliers. That ran counter to the idea that smaller firms were supposed to get the SBA contracting award, including women-and-minority-owned businesses. His Quicken Loans firm contributed $750,000 to President Donald Trump’s 2017 inauguration.
So, the SBA EIDL program was controlled by a firm owned by a friend of President Donald Trump. With that, can we ask if that firm deliberately helped white, GOP-leaning firms in EIDL assistance after Trump lost the 2020 Election?
There’s no language or evidence that SBA EIDL program was done in a way that really helped black businesses, even as the SBA put on a face that it intended to help black businesses. Indeed, by March of 2022, it was reported that “88% of Minority-Owned EIDL Recipients Need More Funding” in a survey reported by Hello Skip, an Oakland-based firm focusing on SBA loan assistance advise. The other question not answered is did those “ Minority-Owned EIDL Recipients”, one of which was ZENNIE62MEDIA, get any help? If they were treated as ZENNIE62MEDIA, INC. was, the answer was no.
In total, Congress should not allow the SBA to stop the EIDL program, but fund it so that it lasts beyond the 2022 Mid-Term Election out of political fairness, and review it, and make it help black businesses as well as those just simply the victim of the fraudulent way the SBA EIDL program was done.
Stay tuned.
P.S.: This is a file I found that contains a giant list of FOIA, or “Freedom of Information Act” requests related to the SBA EIDL Program and from 2017 to 2020. A brief read reveals what problems many were facing during the Pandemic Period starting in March of 2020. See: https://www.governmentattic.org/41docs/SBAfoiaLogs_2017-2020.pdf