SBA Offers Disaster Loans To Businesses Hit By Blackout
Last Thursday, the federal Small Business Administration, in the
in Northwest Queens, staged one of the day's three related events held by various agencies to investigate the blackout and help affected residents and business owners to deal with it. On the previous Monday, SBA officials had announced that Northwest Queens was an official disaster area. Because of the declaration, small businesses that sustained economic injury because of several days' power outage were eligible for low interest loans. These loans could be as much as $1.5 million, at a 4 percent interest rate and with loan terms up to 30 years. On Thursday, Steven C. Preston, recently appointed SBA administrator, and Congressmember Nydia M. Velazquez appeared on Greenpoint Avenue in Sunnyside in front of stores that had been badly affected by the outage, to announce the loans program.
The other two events were a meeting in Astoria that was strangely under-attended on Thursday night and a hearing which began at 11 a.m. and lasted well into the afternoon held at LaGuardia Community College's Main Stage Theatre, at which Kevin Burke, chairman, president and chief executive officer of Consolidated Edison, sparred with indignant members of the state Assembly standing committees on energy and corporations, authorities and commissions.
One thing making the SBA event unique was its outdoor setting. It might have seemed a good idea at the time it was planned, anticipating warm summer weather, to make the announcement outdoors, but the designated day turned out to be the last in an insufferable heat wave. Preston and Velazquez (who is ranking Democratic member of the small business committee of the House of Representatives) didn't let it bother them as they addressed the media in front of the Associated Supermarket at Greenpoint Avenue and 44th Street and then crossed the street to enter the Las Camelias meat market to talk to the owners about the possibility of a loan. Las Camelias may indeed need one, because the store's refrigeration was inoperative for four days and losses were estimated at between $17,000 and 18,000. Present with Preston and Velazquez on Greenpoint Avenue was Joyce O. Moy, executive director of economic development at LaGuardia Community College, who said that loans from New York City were also available. The interest rate for city loans was 2 percent for a period of two years, or only 1 percent if the payback is by direct payment.
The SBA loans are formally called Economic Injury Disaster Loans, or EIDLs. They are working capital loans for meeting financial obligations that cannot be met in the aftermath of a designated disaster-the one at hand being "New York #10554, Power Outage Precipitated by Extreme Heat and Rising Temperatures that occurred July 17, 2006 and Continuing."
Loan assistance is available to a business only to the extent that it and its owners cannot meet necessary financial obligations owing to the disaster; a determination made by the SBA. Applicants qualify for EIDLs only if they do not have credit available elsewhere; and again, that determination is made by SBA. Applicants must show they have repayment ability. A loan in excess of $5,000 must be secured with collateral, which would entail a lien on an applicant's business and/or personal real estate. Loans would not be denied for lack of a fixed amount of collateral. The total loan amount available to any one business (including affiliates) is $1.5 million. SBA determines loan amounts, each one being based on the amount of disastercaused economic injury and the disastercaused financial needs of the business. The interest rate is 4 percent. Loan terms are individually determined, based upon what is reasonable, considering an applicant's ability to repay. The maximum loan term is 30 years.
A temporary loan assistance center has been set up at Commerce Bank, 31-04 Ditmars Blvd., Astoria. Office hours are 10 a.m. to 8 p.m., Monday through Friday. Applications for "New York #10554, Power Outage, etc." must be filed by May 1, 2007. Additional information is available at the SBA Disaster Assistance Customer Service Center, phone 1-800659-2955, 8 a.m. to 9 p.m., Monday through Saturday, EST, or visit http://www.sba.gov/disaster.