North Shore Eye Doctor Testifies SBA Failures Left Him 'Helpless'

HIGHLAND PARK, IL — A local ophthalmologist testified before the U.S. House Small Business Committee Wednesday about his frustration with the Small Business Administration's handling of its Economic Injury Disaster Loan, or EIDL, during the coronavirus pandemic.

Dr. Craig Gerstein, of Highland Park, runs the Gerstein Eye Institute in Chicago's West Rogers Park neighborhood, where his father Melvyn founded the practice 50 years ago. Gerstein is also a clinical assistant professor at Northwestern University.

The business lost 85 percent of patients as the COVID-19 crisis spread through the Chicago area, according to Gerstein, who decided to keep all 13 employees on staff and keep limited office hours for emergencies and patients who needed monitoring.

Gerstein realized he needed financial help to stay afloat, and, on March 23, he learned of the SBA's EIDL program. He said the application were supposed to take about three weeks to process, with loans received about a week later on a first-come, first-served basis.

"Despite several crashes of the website, and countless hours waiting on the SBA help line, I was able to complete my application 13 hours later," Gerstein told members of the committee.

Three weeks after submitting the application, its status on the agency's online portal changed from "pending" to "your recent Covid-19 EIDL application has been received. Please reapply at the following website to complete your self-certification," he said, adding that the people answering the phones at the SBA help line could not explain the message.

So Gerstein said he applied again, which generated a new application number. Another help line representative could not provide an answer why, so he emailed customer service and was directed to either connect to a non-functional website, make another call to the help line or write another email, he said.

"After weeks of waiting in uncertainty, the SBA could provide no answers and left me in a helpless position. I couldn't use the website, which had been removed, the help desk had no answers and could not address my concerns, and the email service offered nothing but an automatic reply," he told members of the House committee.

That was when, Gerstein said he contacted his local member of Congress, Brad Schneider, in desperation. The congressman, a Democrat and Deerfield resident, said he has known the eye doctor for many years. Schneider has signed on to a bipartisan letter from members of the Small Business Committee calling on the SBA to address problems identified with the EIDL program, according to his staff.

A month after applying, customer service sent an email saying Gerstein had to reapply because the SBA "developed a new streamline application process," and everyone who had previously submitted an application had to do so again. But an SBA liaison continued to give "vague answers" to Schneider's office, the ophthalmologist said, leaving him nowhere to turn for information and loan details he needed to determine if he whether he needed to close up shop.

"Uncertainty kills small businesses, and this placed an extreme pressure on my practice," Gerstein said. "We do not have the luxury of time. Invoices, rent, utilities, health and malpractice insurance payments and the salaries of my staff continued to accumulate with no realization in how I would be able to cover those expenses."

Six weeks after applying, the SBA notified Gerstein it had approved him a loan totaling far less money than he needed — payments were capped at $150,000, Schneider said. As a result, Gerstein said he is looking for a way to borrow the money needed to keep operating from private banks.

At the hearing, Schneider said he would continue to seek answers from SBA representatives.

"One of the things I think we also have to explore is why did the SBA think it was prudent to not disclose information about changing policies. Why did they not give an alert that we were running behind?" Schneider said.

"The greatest frustration sitting at an airport is when they don't tell you why your plane is delayed. That's an inconvenience," he said. "Having loans delayed and these other things is devastating for these businesses."

In a statement after the hearing, Schneider said small businesses are left "hanging on by thread" when the SBA fails to communicate or distribute funding effectively.

"EIDL loans enable businesses to navigate the immediate challenges of the Covid crisis and also plan for their long-term future," Schneider said. "Over the past three months, however, business owners have waited far longer than the SBA promised and lacked the necessary information — such as the status of their loan application and expected loan amount — while facing make or break decisions.

"I greatly appreciate Dr. Gerstein sharing his strong voice as a small business owner from our community in Illinois, and his incredibly frustrating, and all too common, experience with the SBA. The SBA and the Trump Administration as a whole have to do a much better job administering this program and communicating with small business borrowers."

Watch testimony from Dr. Craig Gerstein of the Gerstein Eye Institute before the U.S. House Small Business Committee on June 10, 2020 »