Congress Clears Velazquez Sandy Legislation

Washington, DC – Small businesses harmed by Hurricane Sandy may soon be able to reapply for assistance from the U.S. Small Business Administration (SBA) due to legislation approved by Congress Monday. The bill, H.R. 208, is authored by Rep. Nydia M. Velázquez (D-NY), and would allow many small firms in New York and throughout the country to seek emergency loans from the SBA given the agency's slow response following Sandy in 2012.

"The fact is the SBA was caught flatfooted when Sandy came ashore and small businesses seeking relief suffered because of the agency's slow response," Velázquez said. "This new law will mean entrepreneurs in New York and up and down the East Coast will get another chance to apply and be made whole through the SBA's loan process."

Following Hurricane Sandy, Velázquez, who is the top Democrat on the House Small Business Committee, helped document problems in the SBA's disaster loan assistance program. Among other issues, her analyses demonstrated that small businesses waited 46 days to get their application processed by SBA, a three-fold increase over previous Atlantic storms. Many businesses withdrew their loan applications out of frustration, while others never filed a loan after seeing other entrepreneurs in their community encounter significant red tape.

In addition to reopening the disaster loan program, H.R. 208 would make needed reforms to the SBA's disaster lending functions, so the initiatives operate more efficiently in the wake of future disasters. SBA will be required to provide upfront notification to borrowers on necessary documentation, as well as establish clear written policies for loan officers. By clearing up confusion for both borrowers and SBA staff, H.R. 208 will ensure funds flow more swiftly to businesses after future catastrophes. Firms would also no longer be prohibited from posting business assets as collateral. This is important as many entrepreneurs previously have had to use personal assets for loan collateral.

"For a small business that is struggling to stay solvent after a major disaster strikes, having to wait more than six weeks for an emergency loan isn't an option," Velázquez noted. "These reforms will mean that when disasters strike, the SBA is better prepared to channel assistance to small firms quickly, without needless delays."

The passage of H.R. 208 marks the most significant reforms to SBA's disaster lending programs since Hurricane Katrina struck in 2005, prompting Congress to update the emergency lending initiative.

"Helping our small businesses after natural disasters should not be a partisan issue," Velázquez noted. "I am pleased Congress was able to work together to pass this measure and look forward to seeing the President sign it into law shortly."

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