A group of industry organizations is calling on the U.S. government to address startupsâ€™ 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 letterâ€™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 â€œaffiliation ruleâ€ 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 â€œleft without support, at a time when they most need it to keep innovating,â€ the group noted.