The U.S. Small Business Administration announced last week that it has widened access to its disaster-assistance loans for businesses adversely affected by the Sept. 11 terrorist attacks, making them available nationwide.
Before last week, only businesses in officially designated disaster areas such as the New York City area and Washington, D.C., were eligible to apply for the SBA’s Economic Injury Disaster Loans (EIDL). Now, any small business in the United States that can show “economic injury” stemming from the terrorist attacks – or resulting from subsequent actions taken by the federal government – can apply.
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Small businesses are eligible for a loan of up to $1.5 million to help pay ordinary expenses – such as fixed debts, payroll expenses or accounts payable – that they would have paid if the terrorist attacks had not occurred.
Interest rates on the loans are 4 percent, with maximum terms of 30 years. Applications are due by Jan. 21.
Officials at the SBA’s headquarters in Washington, D.C., described the broadening of the EIDL program as an “unprecedented change” to its disaster loan program.
“I’ve heard from small businesses across Rhode Island who have been impacted by the tragic events of Sept. 11,” said Mark S. Hayward, director of the SBA’s Rhode Island office. “President Bush believes that the wider availability of these loans will provide the necessary capital small businesses need.”
But the criteria for determining economic injury are tightly defined and might exclude businesses that have been hurt indirectly by the economic fallout from the attacks, officials said.
Generally, the SBA will use the following criteria to determine eligibility:
Your small business was located in an airport or other facility that was closed or suspended its operations or was otherwise disrupted as a result of national security as mandated by the federal government; or
Your small business supplied or provided services to a business that was located in or near the World Trade Center or Pentagon; or
Your small business supplied or provided services to a business or industry adversely affected by the terrorist attacks or federal action; or is otherwise dependent on a business or industry so adversely impacted; or
Your small business is dependent upon a business or other organization that was closed or suspended its operations or was otherwise disrupted as a result of the terrorist attacks or federal action; or
Your small business was directly affected by the terrorist attacks or Federal actions taken in response to the terrorist attacks between Sept. 11 and Oct. 22, 2001.
Rhode Island businesses interested in applying can contact the SBA Area Disaster Office in Niagara Falls at 1-800-659-2955.
The process involves filling out a form – similar to a bank-loan application, according to the SBA – and submitting a narrative describing how the Sept. 11 terrorist attacks caused direct economic injury to the business.
The Niagara Falls office as of early last week had received applications from airport vendors and parking-lot operators, among other businesses, according to public affairs specialist Frank Adinolfe.
When asked if hotels, travel agencies or other tourism-related businesses that suffered cancellations following the attacks would be eligible, Adinolfe said their eligibility would be determined on a case-by-case basis. The SBA says it will try to make a decision within three weeks of receiving an application.
Dale Venturini, president and CEO of the Rhode Island Hospitality and Tourism Association, said she expects at least a few of the group’s 500-plus members to apply for loans.
“It’s hard to say, because a lot of (members) are taking a wait-and-see approach,” she said. “Some are hanging in there. Others are not doing well at all.”
She said small hotels and bed-and-breakfasts, as well as upscale restaurants, have been hardest hit since Sept. 11.
The SBA nationally has granted more than 460 disaster loans totaling nearly $50 million to businesses in the areas surrounding the World Trade Center and Pentagon. For more information about the SBA’s disaster-assistance program, visit the SBA’s Web site at
www.sba.gov/disaster, or call the SBA’s Rhode Island office at 401-528-4576.
