August 31, 2005--With Alabama, Louisiana and Mississippi still reeling from the impact of Hurricane Katrina, several federal agencies are preparing to assist small business owners in recovery efforts.
On Wednesday, Small Business Administrator Hector Barreto vowed to be "swift in our efforts" to help small business owners rebuild their lives.
"We've been there before, and we're ready to provide recovery aid again," Barreto said in a statement.
Michael Lampton, a spokesperson for the SBA, said the priority was to help storm victims get to safety and back on their feet.
"Most people are going to want to get themselves together before checking in on their business," he said.
Adding to their woes, many businesses not leveled by the storm are now facing rising floodwaters. That and continued looting.
"People are still being evacuated from these areas, so business owners can't access their businesses to gauge the damage," Lampton said, adding the full impact won't be known for awhile.
Earlier in the day, the expected cost of lost business in the area pushed retail stocks down on the New York Stock Exchange. Insurance analysts are now putting losses from the storm as high as $25 billion, more than the total from last year's four hurricanes combined.
After those storms, the SBA approved over $2.1 billion in disaster aid to some 64,500 residents and small business owners along the Florida coast and in 13 other states.
Along with Federal Emergency Management Agency teams, SBA officials and loan officers will be on hand at every disaster recovery center in area, Barreto said.
In addition to loans of up to $200,000 for primary residences and $40,000 for personal property, the agency offers businesses as much as $1.5 million to replace damaged real estate, machinery, equipment and inventory. Those unable to pay bills or meet operating expenses may also qualify for Economic Injury Disaster Loans.
Also on Wednesday, the IRS announced that hurricane victims will have extra time to file taxes, extending the Sept. 15 deadline to Oct. 31 for those living in disaster zones.
Yet despite the widespread devastation, the storm might have only a "fairly modest" impact on the economy, said White House economic adviser Ben Bernanke.
Speaking on CNBC television Wednesday morning, Bernanke said reconstruction efforts would add jobs and growth to the economy, so long as the impact to the energy sector proves temporary. He added that early indications showed the hit to energy would be short-term. The Bush administration has already moved to tap strategic oil reserves to counter energy supply interruptions.