Sen. Charles Schumer (D-N.Y.) is calling for the creation of a federal emergency loan program to help the nation's small-business owners deal with frozen lines of credit from banks and other lenders.

At a news conference on Sunday, Schumer said it would take at least a month before small businesses starting feeling the impact of the $700 billion financial market rescue package  approved by Congress last week.

In the meantime, he urged the federal government to provide direct loans through the Small Business Administration  to assist owners in covering payroll, inventory and other operating costs.

"Businesses throughout the New York area are having their credit tightened up," Schumer said, adding that more owners would be forced to layoff workers, cut spending and raise prices.

He estimated the program would require "tens of billions" of dollars to keep thousands of small firms from going under.

In a survey of more than 750 small-business owners released last week by American Express OPEN, 55 percent reported cash-flow problems, up from 49 percent a year ago. Among owners experiencing a cash crunch, the biggest concerns were paying bills, making payroll, and having enough cash to generate new business, the survey found.