Small businesses devastated when Superstorm Sandy swept across the East Coast in 2012 quickly applied for federal loans to pay for recovery costs. But the process of securing one of those small-business loans took a lot longer than expected, leading many to withdraw or cancel their applications.
Now, a bill making its way through Congress would let small-business owners affected by Sandy reapply for the loans.
“For a small-business owner struggling to keep their doors open after a hurricane or flood, waiting a month and a half for assistance is not an option,” said Rep. Nydia M. Velázquez, D-NY, who sponsored the bill.
“These delays can make the difference between whether a business stays open or closes, costing our community badly needed jobs.”
Initially, the Small Business Administration hoped to process loans for Sandy victims in 21 days. It ended up taking the agency an average of 45 days to go from receiving a loan application to making a decision about it, more than twice the amount of time the SBA was hoping for.
“Right after the storm, within a week or two, we had the SBA down here working with businesses right away. So their response time was fantastic,” said Lori Pepenella, communications director for the Southern Ocean County Chamber of Commerce. “But as things of course moved forward, there was just a tremendous amount of need.”
Pepenella said some small-business owners had a difficult time applying for loans amid the post-disaster chaos.
“People were putting in applications and weren’t getting immediate responses, so they didn’t necessarily get the loan,” she said.
New Jersey state Sen. Jim Whelan, who has pushed for tax breaks for small businesses affected by Sandy, said the bill would be a positive step, since many firms are still struggling to bounce back from the storm almost three years later.
“I know of a restaurant in Atlantic City that is still operating out of a truck,” he said.
Whelan, D-Atlantic, noted that “confusion” about federal aid programs often hampered recovery efforts in New Jersey.
“We have so many businesses in the Shore communities and in the mainland communities along the Delaware Bay that have been impacted and have been shut out of getting the SBA [loans] for various reasons, some of which [include] frustration that people had or the inability to navigate the bureaucracy,” he said.
The current bill, called the Superstorm Sandy Relief Act of 2015, would also streamline the agency’s disaster response rules and ensure adequate staff is on hand during future disasters.
After being passed by a voice vote in the House on Monday, the bill now heads to the Senate.
Earlier this year the Federal Emergency Management Agency — or FEMA — reopened more than 140,000 claims from Sandy victims who said they were underpaid by the national flood insurance program.