House Panel Approves Velazquez Legislation to Assist Sandy Affected Businesses

Washington, DC – The U.S. House of Representatives Committee on Small Business today approved legislation authored by Rep. Nydia M. Velázquez (D-NY) to reform the Small Business Administration’s (SBA) disaster lending initiative. Among other changes, the bill, H.R. 208, “The Superstorm Sandy Relief Act” would give firms impacted by Hurricane Sandy the opportunity to reapply for a disaster loan from the agency.

“The SBA’s response to Hurricane Sandy was woefully inadequate, leaving many small business owners out in the cold,” Velázquez noted. “This legislation gives businesses in New York another chance to apply for help and will ensure SBA is not caught flatfooted after future catastrophes.”

Following Hurricane Sandy, the Government Accountability Office (GAO), the SBA’s Inspector General and the Democratic side of the Small Business Committee produced analyses finding severe shortcomings in the SBA’s loan approval process. Among other problems, business owners had to wait on average 46 days for emergency loans to be approved. This amounted to a three-fold increase over previous processing times following other hurricanes.

“For a small business owner whose inventory is flooded or whose property is damaged in a storm, waiting a month and a half for SBA to sort through its own red tape is simply not an option,” Velázquez added. “Delays like these can make the difference between whether a business continues operating or has to shut its doors.”

Beyond reopening the loan application process, Velázquez’s measure would make a number of other changes to streamline SBA’s disaster response functions and enhance transparency. The SBA would be required to report to Congress on its loan processing times and approval rates. It would also revise its disaster plan so adequate resources and staff are in place during future catastrophes. In addition, the measure would significantly improve the SBA’s program that provides emergency loans to homeowners after disasters.

“When a hurricane, tornado, or earthquake strikes, businesses owners’ and homeowners’ lives are literally turned upside down,” Velázquez concluded. “It is my hope that the legislation before us creates a more responsive SBA – one that is able to rise to the challenge when the next disaster strikes.”

The legislation passed the Committee on a bipartisan basis. It must now be considered by the full U.S. House of Representatives.

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