Velázquez Works to Help Disaster-Impacted Small Businesses Rebuild
Bill to Help Small Firms Recover Passes Committee
Washington, D.C. –After 2017 marked the costliest year on record for climate and weather-related disasters, today, the House Committee on Financial Services passed a bill authored by Rep. Nydia M. Velázquez (D-NY) to help small businesses rebound from natural disasters. Velázquez’s bill, HR 4792, the Small Business Access to Capital after a Natural Disaster Act, would require the Securities and Exchange Commission’s (SEC) Office of the Advocate for Small Business Capital Formation to identify and address the unique challenges that small businesses and investors face in securing access to capital after a disaster.
“When natural disaster strikes, many once-thriving Main Streets turn into ghost towns and small business owners face the harsh reality of soaring bills and lost revenue,” said Velázquez. “In 2017, we saw the devastating impact of unprecedented damages to communities across the Mainland and especially in Puerto Rico and the Virgin Islands. I encourage Congress to pass my bill helping small businesses secure the loans and necessary capital they need to get back up and running after disaster strikes.”
Small firms are a cornerstone of local economies, however, according to the Federal Emergency Management Agency (FEMA), over 40 percent of small businesses never reopen after a disaster. Furthermore, small and midsize businesses make up ninety percent of private companies in Puerto Rico, and after Hurricane Maria, two-thirds of these firms have been forced to close, at least temporarily. In New York and New Jersey, over five years since Superstorm Sandy, local communities continue to suffer from millions in lost revenue after businesses have been forced to close or delay reopening. In Toms River, New Jersey, the local Chamber of Commerce estimates that ongoing small business recovery costs $600 million per year in lost rateables even at this point.
Established in 2016, the SEC’s Office of the Advocate for Small Business Capital Formation is tasked with identifying issues and proposing changes to benefit small businesses and their investors. Currently, the Advocate is required by law to identify issues related to access to capital for small businesses, including the unique challenges faced by women and minority-owned small firms. Velázquez’s bill requires the Advocate to now also consider the unique challenges that small businesses affected by natural disasters have with securing access to credit and to work to promote their interests.
“Unless we act swiftly to help small firms reopen their doors, we will only see more empty streets and abandoned communities,” said Velázquez. “In Puerto Rico, we have already seen an exodus to the Mainland after Hurricane Maria. Addressing issues of capital for a mom-and-pop shop, or local manufacturer is a much needed step towards rebuilding entire communities.”
Velázquez is the third most senior Democrat on the House Financial Services Committee and Ranking Member of the House Committee on Small Business. The Small Business Access to Capital after a Natural Disaster Act passed in the Financial Services Committee with bipartisan support by a vote of 57 -0. The Act must now be considered on the House floor for a vote.