House Committee Revamps SBA Disaster Loans
March 16, 2007 -- The House Small Business Committee has approved a package of bills aimed at improving the federal government's emergency assistance for small businesses.
The package, which the House is expected to vote on within the next two weeks, is a response to widespread criticism of the Small Business Administration's handling of disaster loans for Gulf Coast businesses in the wake of Hurricane Katrina, according to Rep. Nydia Velazquez (D-N.Y.), the committee's chairwoman.
The Relief for Entrepreneurs: Coordination of Objectives and Values for Effective Recovery Act, or RECOVER, requires the SBA to create a comprehensive plan for future large-scale disasters, including detailed strategies for hiring extra staff and coordinating with other federal agencies, among other initiatives. It also allows private lenders to process disaster-loan applications when demand becomes excessively high, while creating a separate grant program for small businesses still recovering from hurricanes Katrina, Wilma, and Rita.
At the same time, the Disadvantaged Business Disaster Eligibility Act would extend time limits on the SBA's 8(a) program for small businesses in Louisiana that were affected by Katrina.
"We have heard from countless small-business owners that these critical programs must be modernized and improved to be effective for entrepreneurs," Velazquez said in a statement. She said the legislation provides the SBA with a variety of tools to help small businesses that are still rebuilding after the storms, while ensuring it is better prepared for future emergencies.
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