Isabella Casillas Guzman, President Joe Biden’s choice to run the Small Business Administration, inherited a portfolio of nearly $1 trillion in emergency aid and an agency plagued by controversy when she took over in March. She has been sprinting from crisis to crisis ever since.

Some new programs have been mired in delays and glitches, while the SBA’s best-known pandemic-relief effort, the Paycheck Protection Program, nearly ran out of money for its loans this month, confusing lenders and stranding millions of borrowers. Angry business owners have deluged the agency with criticism and complaints.

Now, it’s Guzman’s job to turn the ship around. “It’s the largest SBA portfolio we’ve ever had, and clearly there’s going to need to be some changes in how we do business,” she said.

When the coronavirus crisis struck and the economy went into a free fall last year, Congress and the Trump administration pushed the SBA to the forefront, putting it in charge of huge sums of relief money and complicated new programs.

It is by far the smallest cabinet-level agency, with an annual operating budget that is typically less than half of what the Defense Department spends in a day. It was long viewed within the government as a sleepy backwater.

But when the pandemic sent unemployment claims soaring, Congress responded with an unprecedented plan: Give businesses money to keep their workers employed. Just seven days after President Donald Trump signed the $2.2 trillion CARES Act in late March 2020, the SBA began accepting applications for the Paycheck Protection Program.


Agency employees describe a blurry month of round-the-clock work to manage the program’s launch and early days. The agency’s 68 district offices, which normally field a few hundred inquiries a week, received 12,000 phone calls a day from desperate business owners. A rotating group of a dozen people camped in an ad hoc war room at the mostly empty headquarters to write the program’s rules and revamp technology systems to handle the onslaught of applications.

Despite lots of speed bumps — including confusing, often-revised loan terms and several technical meltdowns — the program enjoyed some success. Millions of business owners credit it with helping them survive the pandemic and keep more workers employed.

Economists are skeptical about whether the program’s results justify its huge cost, but Trump and Biden both embraced the effort as a centerpiece of their economic rescue plans. As the pandemic stretched on and the economy plunged into a recession, the Paycheck Protection Program morphed into the largest business bailout in U.S. history. More than 8 million companies got forgivable loans, totaling $788 billion — nearly as much money as the government spent on its three rounds of direct payments to taxpayers.

But there were pitfalls, some of which will take years to unravel. Fraud is a major concern. Thousands of people took advantage of the rushed program’s minimal documentation requirements and sought illicit loans, according to prosecutors, to fund gambling sprees, Lamborghinis, luxury watches, an alpaca farm and a Medicare fraud scheme. The Justice Department has charged hundreds of people with stealing more than $440 million, and scores of federal investigations are active. (During her confirmation hearing, Guzman promised that she would “prioritize the reduction of fraud, waste and abuse.”)

There were other problems. Female and minority business owners were disproportionately left out of the relief effort. A last-minute attempt by Biden to make the program more generous for solo business owners came too late to help many of them. This month, a new emergency popped up: The program ran short of money and abruptly closed to most new applicants.

“There was no warning,” Toby Scammell, the chief executive of Womply, a company that helps borrowers get loans, said of the latest debacle. His company alone has more than 1.6 million applicants caught in limbo.


The Paycheck Protection Program is far from the agency’s only challenge. It’s also managing a complex and evolving system of low-interest disaster loans of up to $500,000 and new grant funds, created by Congress, for two of the hardest-hit industries: the Shuttered Venue Operators Grant for live-event businesses and the Restaurant Revitalization Fund. (The hotel industry is pushing for its own version.)

Each required the agency to create policies and technology systems from scratch. The venue program has been especially rocky. On its scheduled start day, in early April, the application system completely failed, leaving desperate applicants hitting refresh and relying on social media posts for information and updates.

“I turned to my associate director and said, ‘I figured something like this would happen,’” said Chris Zacher, the executive director of Levitt Pavilion, a nonprofit performing-arts center in Denver. The SBA revived the system three weeks later and has received 12,200 applications, but it does not anticipate awarding grants until late May.

People lower in the tiered priority queue, including Zacher, fear that even if their claim is approved, they won’t see a check until June or July — a major hurdle for venues trying to plan their summer and fall seasons.

“It’s maddening,” Zacher said. “A program that’s supposed to help save indie venues is putting us at a disadvantage because of all these delays.”

Guzman, 51, hears those criticisms relentlessly — the response threads to her agency’s social media posts have turned into primal screams of pain. (“I SERIOUSLY CANNOT TAKE THIS WITH SBA ANY LONGER” is one of the milder replies.) She said she understood the urgency.


“It’s definitely unprecedented — across the board, across the nation — and we are seeing multiple disasters at the same time,” she said. “The agency is highly focused on just still responding to disaster and implementing this relief as quickly as possible.”

This is Guzman’s second tour at the SBA. When President Barack Obama picked Maria Contreras-Sweet in 2014 to take over the agency, Guzman went along as a senior adviser and deputy chief of staff. The women had met in the mid-1990s. Guzman, a California native with an undergraduate degree from the University of Pennsylvania’s Wharton School of Business, was hired at 7UP/RC Bottling by Contreras-Sweet, an executive there.

“I was always impressed with her ability to handle jobs with steep learning curves — she has a quick grasp of complex concepts,” Contreras-Sweet said.

Guzman spent her first stint at the agency focused on traditional projects like its flagship lending program, which normally facilitates around $28 billion a year in loans. This time, the job is radically different.

“We’re working closely to identify opportunities to build up a strong agency to meet this demand of scale,” she said. “The SBA needs to be as entrepreneurial as the small businesses we serve. What I really, truly mean by that is that a more customer-first approach.”

The agency is testing a new “community navigators” program, which will fund local organizations, including nonprofits and government groups, to work closely with businesses owned by people with disabilities or in underserved rural, minority and immigrant communities. It’s an expansion of a grassroots effort by several nonprofits to get vulnerable businesses access to Paycheck Protection Program loans.


Guzman said she was bullish about that effort and other agency priorities, like expanding Black and other minority entrepreneurs’ access to capital — but first, like the clients it serves, the Small Business Administration has to weather the pandemic.

And to do that, it has to stop shooting itself in the foot.

The much-awaited second attempt at opening the Shuttered Venue Operators Grant fund was preceded by one final debacle: The agency announced — and then, less than a day before the date, abandoned — a plan to open the first-come-first-served fund on a Saturday. For those seeking aid that has not yet arrived, the incident felt like yet another kick in the teeth.

Guzman said she was aware of the need for her agency to overcome its limitations and rebuild its checkered reputation.

“This is a pivotal moment in time where we can leverage the interest in small business to really deliver a remarkable agency to them,” she said. “I value being the voice for the 30 million small and innovative startups around the country. What I always say to my staff is that I want these businesses to feel like the giants that they are in our economy.”