New York City residents and big-business operators are not the only victims that will receive support in the aftermath of the Sept. 11 terrorist attacks. The U.S. Small Business Administration has widened access to Economic Injury Disaster Loans to help small business owners recover the losses they incurred from the attacks.
According to regulation by Congress, effective Oct. 22, small business operators across the country may apply for low-interest loans to meet operating expenses that they are unable to meet as a direct result of the destruction of the World Trade Center or damage to the Pentagon. Small business operators are also eligible for this loan assistance if they were affected by any federal action directly relating to the attacks.
This decision represents an unprecedented modification in the SBA’s disaster loan program. Formerly, these loans were only available to large businesses, homeowners and nonprofit organizations located in areas affected by the disaster.
“As a result of the events of Sept. 11, President Bush recognized the need to help businesses beyond the immediate disaster area,” said SBA Administrator Hector V. Barreto. “The president believes that the wider availability of these loans will provide the necessary capital small businesses need in a quick and efficient manner.”
According to Barreto there are small business owners all over the country that have suffered losses.
“With the expansion of SBA’s economic injury disaster loan program, small businesses across the country can receive help,” Barreto said.
Under the federal law, these loans to small business operators must cover regular expenses and obligations until operations return to normal. The filing period to apply for EIDL assistance began on Oct. 22 and will end on Jan. 21, 2002. EIDL funds cannot be used to refinance long-term debt orto expand the business.
Nancy Gilmore, an agent for Triple A Travel in Tallahassee, said the EIDL assistance is a good program, although they were unaffected by the terrorist attacks.
“We have not sought assistance for our travel agency. But this program provides a good source of financial support for companies that are facing closure from September’s attacks.”
Small businesses may apply for a loan of up to $l.5 million if they have suffered substantial economic setbacks from attacks. According to SBA’s South Atlantic representative Avis Berman, there are several criteria used to determine eligibility of applicants.
“If a small business was located in an airport or other facility that was closed or suspended its operations you will have strong consideration for approval,” said Berman. “Some businesses have applied because they supplied or provided services to a business in the World Trade Center or the damaged area of the Pentagon.”
Berman added that at the moment SBA is has not approved any applicants as they are currently disseminating loan applications and responding to applicant’s inquiries nationwide.
The interest rate on these loans is 4 percent, with a maximum term of 30 years. The SBA determines the amount of economic injury, the term of each loan and the payment amount, based on the financial circumstances of each borrower.
There are four SBA disaster area offices serving small business loan applicants across the nation. These offices are located in Niagara Falls, Atlanta, Fort Worth, Texas and Sacramento, Calif. respectively. Disaster Area 2 in Atlanta serves small business loan applicants in Florida and may be contacted at 1-800-359-2227.
These economic injury loans are subsidized through taxes. As a result Congress has mandated that applicants with the financial capacity to fund their own recovery are not eligible for EIDL assistance.
The SBA’s disaster assistance program encourages small business owners, affected by the tragedy, to contact the regional offices to see if they are eligible and visit the SBA web site at www.sba.gov/disaster for more information.