September 8, 2005--With local business development agencies turning to relief efforts, the U.S. Small Business Administration is expecting a surge in loan applications from small business owners hit by Hurricane Katrina, according to a statement released Wednesday.
In the aftermath of last week's storm, the SBA, which oversees federal emergency loans for small businesses, is looking to hire an extra 300 damage inspectors and 400 loan officers in the Gulf Coast region.
The agency needs the additional staff in the region "to help to meet the demand for low-interest loans to homeowners, renters and business owners," SBA Acting Area Director Frank Skaggs said.
In a similar move, the Mississippi Small Business Development Center set up an emergency information depot at its University of Mississippi headquarters in Oxford, Miss. There, dozens of disaster recovery experts, including some with experience helping small businesses rebound after the 9-11 terrorist attacks in New York, were mobilized from a national network of over 1,000 Small Business Development Centers across the country.
The SBDCs, which ordinarily help budding entrepreneurs launch new businesses, have switched gears in response to the storm. At the Mississippi center, they are offering local business owners "accurate and actionable information they need to get their businesses up and running," Doug Gurley, the state director, said earlier this week.
Primarily, that means guiding them through the process of applying for federal emergency loans.
Small business owners in federally declared disaster areas can apply for two types of emergency loans, both administered by the SBA. The first, a physical disaster loan of up to $1.5 million, provides funding to repair equipment, fixtures, and inventory damaged in the storm, and is available to owners without insurance or those with damages that exceed their coverage.
The second is an economic injury disaster loan, which provides up to $1.5 million to small businesses that didn't sustain direct damage, but whose markets were hit by the economic ripple effect of the storm's widespread devastation.
Businesses can apply for both types of loans, though the combined total is capped at $1.5 million. Interest rates on the loans are fixed at 4%. All applicants must first register with Federal Emergency Management Agency.
The Mississippi center is also warning home and business owners against phony contractors offering cheap repair deals, or any disaster relief loans asking for fees.
The center can be reached by phone at (662) 915-5001, toll free in Mississippi 1 (800) 725-7232, or by e-mail at firstname.lastname@example.org.