Lawsuit Filed Against SBA Administrator Carranza Citing Failure To Pay $10,000 Grants Promised To Small Business Applicants

Widerman Malek has filed a federal lawsuit against Small Business Administration (SBA) Administrator Jovita Carranza, requiring Carranza to abide by the express language of the CARES Act, Economic Injury Disaster Loan (EIDL) and EIDL grant program.

“We are working tirelessly to get our small business clients the funding to which the businesses are legally entitled,” said Jim Ippoliti, partner at Widerman Malek. “In our numerous discussions with local Senators and political advocates, we all agree we need to apply the maximum amount of pressure on the SBA and Congress. Filing this lawsuit is one step toward getting these businesses what was promised under CARES.”

Signed into law of March 27^th, the CARES Act included two portions of the EIDL program – the first being the initial grant of $10,000 to be paid to businesses within three days of applying, and the second being the actual loan upon approval.

The approved CARES Act Section 1110(e) specifically provides that small business applicants will receive a grant from the SBA “in the amount requested by such applicant” up to a maximum of $10,000 within three days of applying.

On April 14, Carranza, with no authority to do so, made unilateral changes to the initial $10,000 grant rules that are in direct contradiction to the CARES Act and prevented businesses from getting the Congressionally mandated grant.

The CARES Act does not give any authority to Carranza or the SBA to deviate from the grant requirement. Concerned Congress members have sent multiple letters to Carranza, reminding Carranza that the SBA is required by law to provide a $10,000 grant to each applicant within three days of application, and expressing consternation that Carranza has not complied.

It is no secret small businesses across the country are in desperate need of these funds, and Carranza and the SBA have failed in its mission.

“Our goal in filing this lawsuit is not to make money. It is to get the relief promised by CARES for our small business clients who are in imminent danger of closing permanently,” said attorney Jeff Ippoliti. “We are working to insure these businesses will receive the full $10,000 initial grant due under the CARES Act, as well as the full EIDL loan that is so desperately needed in this incredibly difficult time.”

For more information or comment, contact Jim Ippoliti at jim@uslegalteam.com or Jeff Ippoliti at jeff@uslegalteam.com or 407-566-0001. 

Click here to view the complaint.