Velazquez Calls on Federal Agencies to Provide Timely Assistance for Residents and Businesses in Wake of Sandy

Washington, DC –Rep. Nydia Velázquez (D-NY) sent the following letter to President Obama today calling for quick and comprehensive assistance to all residents and businesses impacted by Sandy:

November 1, 2012

The Honorable Barack Obama
President of the United States
The White House
1600 Pennsylvania Avenue
Washington, DC 20500

Dear Mr. President:

It is estimated that Hurricane Sandy will result in up to $50 billion in damages. The storm has caused extensive physical destruction in several regions, leaving many with significant rebuilding costs. Compounding this challenge is the lack of electricity and clean water, which makes recovery all the more difficult. Like in so many disasters before, federal financial assistance provided by the Small Business Administration (SBA) and the Federal Emergency Management Agency (FEMA) will play an essential role in the economic renewal of the region.

Given this, it is critical that the federal government’s core disaster-related, financial assistance programs operate efficiently and are well-coordinated. First and foremost, outreach to affected businesses must be undertaken aggressively. This means making information available through a wide-range of venues, while recognizing that TV, radio, and the internet may not be accessible for the near-term. Service centers must also be accessible and located in areas that have suffered the greatest amounts of damage. One such area in need of a service center is the Red Hook section of Brooklyn, which had five feet of seawater, flooding many of its small businesses and residences. In addition, immediate resources should be made available to the Lower East Side of Manhattan. This community suffered significant flooding up to and past Avenue C, as well as the loss of a Consolidated Edison (Con Ed) substation, causing a widespread blackout in the area.

With the diversity of those affected, it is also necessary that agency personnel are able to communicate in many languages, including Polish, Spanish, Korean, Mandarin, and Cantonese among others. Reducing confusion should be a focal point; FEMA and SBA must coordinate their application processes so that applicants are not perplexed regarding the need to be turned down for an SBA disaster loan in order to receive FEMA Other Needs Assistance (ONA). SBA partners, such as the Small Business Development Centers (SBDC) located throughout the region, can play a key role in providing this aid, as can the national SBDC network. Doing so will require the reprogramming of SBA funds, so that these partners have the resources they need.

The agency also needs to rapidly process loan applications and provide small businesses with quick decisions. In fact, it has been estimated that over 40 percent of businesses that are damaged during a disaster do not recover – and a year later, closer to 60 percent will actually go under. Those that do receive prompt assistance, however, are more likely to survive. That is why tools such as the Immediate Disaster Assistance Loan program and the Expedited Disaster Assistance Loan program were put in place. If implemented, they can help speed immediate cash infusions into the hands of small businesses so that they can make much-needed repairs or meet unforeseen obligations. With the potential for a massive influx of loan applications, it is appropriate to draw on private sector partners to assist with disaster lending operations. Given the concentration of lenders in the New York City metropolitan area, this makes sense and will help mitigate potential loan backlogs, while reducing protracted processing times. Providing timely processing and loan application decisions will not only aid in the rebuilding efforts, but also allow business owners to consider other financing arrangements in the event that they are turned down for federal financial assistance. As a result, SBA must have sufficient human resources both in processing centers and on the ground to verify losses. Doing so will enable small firms to receive what they need – in a manner that maximizes their ability to recover.

Would-be borrowers also need flexibility as far as loan terms, document requirements, and eligibility for financial assistance. This means deferring payments for existing SBA borrowers in the affected disaster areas, so that businesses do not face the twin challenges of rebuilding expenses, while trying to meet existing debt obligations. The SBA should also waive loan limits in order to help businesses that need large amounts of financial assistance, which will likely be commonplace in the areas affected by this storm. Further accommodations must be made during the application process itself, as the agency may find that many applicants have lost key documents and financial statements due to the storm. In these situations, SBA should provide maximum flexibility regarding documentation requirements.

Ensuring that small businesses receive the assistance they need is absolutely critical to the long-term recovery of this region. Providing this support now will yield significant benefits in the medium- and long-term, including a more rapid return to growth and job creation. While we undoubtedly face many challenges before us, I know that America’s small businesses can count on your administration to stand by them and ensure they receive the help they need in a timely and efficient manner, which is absolutely essential to their viability.

I thank you for your leadership in the response to this disaster. If you have any questions or would like to discuss these matters further, please do not hesitate to contact me.

Sincerely,

Nydia M. Velázquez
Ranking Member, Committee on Small Business

cc:

Janet Napolitano, Secretary, Department of Homeland Security
Karen Mills, Administrator, SBA
Craig Fugate, Administrator, FEMA