A group of industry organizations is calling on the U.S. government to address startups’ need for support and clarify guidelines on a financial assistance program meant to aid small businesses impacted by the COVID-19 crisis.
In a letter to Steven Mnuchin, secretary of the Department of the Treasury; Jovita Carranza, administrator of the Small Business Administration; and Russell Vought, acting director of the Office of Management and Budget, the group requested for clear guidelines or regulatory adjustments to the small business 7(a) loan program.
The letter’s signatories include the SmallSat Alliance, Commercial Spaceflight Federation, Financial Executives International, Dcode and ACT – The App Association.
The group is urging the SBA to issue a waiver to the “affiliation rule” under the Coronavirus Aid, Relief, and Economic Security Act to mitigate confusion on the eligibility of private equity-backed firms seeking loan assistance.
The organizations are also recommending the SBA to allow startups to apply for a small-business status, which is intended for firms with less than 500 employees including personnel under affiliate companies.
Amid the COVID-19 pandemic and CARES Act implementation, startups have been “left without support, at a time when they most need it to keep innovating,” the group noted.