Guzman receives Senate confirmation to lead SBA

Confirmation comes amid pressure to get pandemic aid to the smallest businesses

Guzman told senators at a confirmation hearing that she would focus on getting pandemic aid to businesses with fewer than 10 employees.  (Bill O’Leary/The Washington Post Pool Photo)
Guzman told senators at a confirmation hearing that she would focus on getting pandemic aid to businesses with fewer than 10 employees. (Bill O’Leary/The Washington Post Pool Photo)
Posted March 16, 2021 at 3:18pm

The Senate voted 81-17 Tuesday to confirm Isabel Guzman, President Joe Biden's nominee to lead the Small Business Administration.

As SBA administrator, Guzman will oversee the remaining disbursements from the Paycheck Protection Program, a forgivable loan program that was a lifeline to small businesses hit hard by the COVID-19 pandemic. 

"The Small Business Administration has overseen two pandemic-related programs that will dole out more than $1 trillion to our nation's small businesses, nonprofits, and religious institutions," Senate Majority Leader Charles E. Schumer, D-N.Y., said on the floor. The agency will also play a major role as the economy recovers, he said.

"Ms. Guzman could not be more ready. She comes from a family of small-business owners herself. Her dad ran his own veterinary clinic," he said. "She has just finished a stint as a top official at California's Office of Business and Economic Development, helping support the fifth largest economy in the world." 

Guzman won support from both Democrats and Republicans throughout the confirmation process, as well as the endorsement of small business groups.

Rep. Blaine Luetkemeyer, the highest ranking Republican on the House Small Business Committee, said he looks forward to working with Guzman in a statement to CQ Roll Call.

"As America begins to safely open up for business, Democrats must work across the aisle to responsibly provide targeted relief for small businesses that need it most," the Missouri Republican said. "I look forward to working with Administrator Guzman and Committee Democrats to provide bipartisan, deregulatory policies for Main Street USA that pave the way toward a pre-pandemic booming economy."

The confirmation marks a return to the SBA for Guzman, who was deputy chief of staff and senior adviser to Administrator Maria Contreras-Sweet during the Obama administration. Guzman most recently worked as director of California's Office of the Small Business Advocate, where she oversaw the state's $500 million grant program during the pandemic.

Guzman will take over supervision of the Paycheck Protection Program, which has kept small businesses afloat, but has faced criticism about accessibility, especially for smaller and minority-owned businesses. 

The program, established in one of last year's pandemic relief bills, has distributed loans of up to $10 million to businesses with up to 500 employees. The relief law enacted this month allocated another $7.3 billion in funding to the program.

A bipartisan group of lawmakers is working to extend the program through the end of May, which would give the SBA more time to work through a backlog of applications. Without congressional action, the program would end March 31.

FiscalNote, the parent company of CQ Roll Call, has received a loan under the program.

Guzman, who appeared before the Senate Small Business and Entrepreneurship Committee on Feb. 3 for a confirmation hearing, said she would focus on delivering aid to minority-owned businesses and those with fewer than 10 employees. Those businesses had a more difficult time getting federal aid during the early months of the pandemic because they lacked relationships with commercial banks tasked with distributing the loans.

She faced questions from lawmakers about oversight of the program, including eligibility. Republicans pressed Guzman on whether Planned Parenthood should have been allowed to receive loans given the organization's size. Democrats said Planned Parenthood healthcare centers secured the aid legally. 

Guzman said she would review and enforce eligibility requirements. 

Biden has already made changes to the program to get more aid to smaller companies. For a two-week period ending March 10, the administration restricted access to the program to only businesses with fewer than 20 employees. The equation used to calculate loans was also revised to allow sole proprietors, such as home repair contractors and beauticians, to qualify for more aid.

The administration also removed restrictions that prevented small business owners convicted of a nonfinancial crime within the last year from applying for loans, a change Democrats pushed for at Guzman's hearing.

‘Really painful time’

Karen Harned, executive director of the National Federation of Independent Business Small Business Legal Center, said Guzman will take over the agency during a "really painful time for small business owners." The trade group, representing its small business members, endorsed Guzman.

"Millions have gone out of business," Harned said in an interview with CQ Roll Call. "We've got a lot of ours that are doing okay, but the main thing is they want to reopen and… get their sales and their business back up to the level that was before the pandemic hit."

Guzman will have to ensure that small businesses that are still trying to get PPP loans can do so and "that those that did access it are not tied up with a bunch of pure bureaucratic paperwork to get their loans forgiven," Harned said. "Especially if their loan was $150,000 or less, which in the scheme of things is not that much money for the federal government."

Harned said her organization endorsed Guzman on the recommendation of member businesses, which reported that Biden's pick had a "listening ear and really tried to help small businesses in California." However, the organization's members are wary of the administration's regulatory agenda, she said.

"This administration has been very clear that they are not fans of the deregulatory effort that came before it and, honestly, our members were," she said. "Regulation is a tremendous burden for small business owners, disproportionately."

Small businesses will watch whether Guzman supports the SBA's Office of Advocacy, which represents the companies' views to the White House, Congress, federal agencies and state governments. The office is particularly instrumental during the rulemaking processes at other federal regulators, as it can advocate on behalf of small businesses, Harned said.

"In the area of regulation, a lot of that cake is baked before you get to public comment," she said. "The only people at the table, again, for small business is the Office of Advocacy. We need the agencies to understand that 'one size fits all' regulatory solutions are never good for small business."