Collected resources on record restrictions for small business relief

*NEW POST (Jan. 21, 2021): Applying for SBA COVID-19 relief with a criminal record in 2021

On this page, we collected a variety of materials on the restrictions related to arrest or conviction imposed by the Small Business Administration (SBA) on small business owners seeking relief under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program during 2020. Included are proposed reform legislation, lawsuits filed, academic studies, letters from legislators and major organizations, articles by us and by others, and official documents related to this issue. (For more current information, see: Applying for SBA COVID-19 relief with a criminal record in 2021.)

After the first COVID-19 relief bill in March 2020, the CARES Act, the SBA imposed broad criminal history restrictions on applicants. Following the introduction of a bipartisan Senate bill, Treasury Secretary Steven Mnuchin agreed on June 10, 2020, to revise the PPP restrictions.  On June 12, 2020, SBA issued new regulations and applications forms to ease some of the barriers in the PPP.  On June 24, 2020, the SBA further relaxed its criminal history barriers for PPP assistance, this time in a far more significant fashion, and in a manner that makes the business owners who are suing the SBA now eligible to apply.  The new regulation and application form came less a week before the June 30, 2020 deadline to apply for relief.

Meanwhile, two lawsuits were filed against the SBA in federal court in Maryland, asserting that the SBA’s criminal history restrictions are beyond the agency’s authority, arbitrary and capricious, and contrary to the text of the CARES Act; the second lawsuit also asserts that the restrictions fall hardest on minority businesses due to the impact of over-criminalization on communities of color.  On June 29, 2020, a federal judge ruled that the SBA’s criminal history restrictions on PPP, except for the June 24 policy change, were likely unlawful.  The court extended the deadline to apply, but only for the small business owners who had sued.

In a dramatic finale, Congress extended the PPP application deadline to August 8, 2020 for everyone.  This extension, signed into law on July 4, gave business owners made eligible under the June 24, 2020 policy a meaningful opportunity to learn about their eligibility and complete the application process.

Proposed Reform Legislation


Academic Studies

Letters from Legislators

Letters from Major Organizations

CCRC Articles

Official Documents

Other Articles