Sept. 23, 2005
On the heels of recent distorted reports in this publication about a special post 9/11 loan guarantee program administered by the SBA, it's time for a reality check.
In the interest of setting the record straight, let me point out that the SBA had a disaster recovery, low-interest loan program in which it directly made loans to victims of the 9/11 terrorist attacks. Every eligible loan applicant in New York City and across the country who qualified for a loan under this program was able to receive one. There was ample funding. There was no competition between small businesses for this money, as implied by these articles.
Separately, Congress pursued legislation to respond to the needs of small businesses across the country which through no fault of their own were adversely impacted financially by 9/11. This resulted in the Supplemental Terrorist Activity Relief (STAR) program. Through STAR, small business could obtain loans, guaranteed by the SBA, at commercially available interest rates.
The SBA implemented the STAR program openly as Congress mandated and it was a success. In fact, many small businesses have stated that they would not have made it after the economic downturn caused by 9/11 without these SBA-guaranteed loans.
Finally, because of these articles and misrepresentations, small businesses that received these loans appropriately are unfairly being dragged through the mud. The real 'outrage' would be if this sensational reporting also causes them to lose customers. That would truly be a second injury.
Hector V. Barreto
U.S. Small Business Administration