Posts Tagged ‘disaster loans’

SBA Simplifies Online Disaster Loan Application

Wednesday, June 20th, 2012

Print and Electronic Forms Now Match

This week, the U.S. Small Business Administration published its revised disaster recovery loan application. Until now, the SBA relied on an electronic loan application that guided applicants through a sequence of 80 screens, based on responses to questions to assess eligibility. The online application bore no resemblance to the paper form of the application, complicating the process for those who like to follow their notes as they work through the screens. The new version of the electronic loan application is identical to the paper form with three pages of information required for business loans.

The new online application can be found at https://disasterloan.sba.gov/ela. The SBA is offering multiple channels to access assistance as small businesses and their advisers become familiar with the new application. A “Help” link appears at the top of each page of the loan application, which directs applicants to online support.  In addition, the SBA offers a dedicated disaster customer service line at 1-800-659-2955 or by e-mail at disastercustomerservice@sba.gov. Further information about the disaster assistance program is available at www.sba.gov/disaster The intent of the new online application is to reduce the burden on applicants and eliminate the confusion resulting from the differences between the paper and electronic versions.  Applicants should also consider sharing their experiences with the new application, both positive and negative, with their elected representatives. Is the SBA a more welcoming partner to work with small businesses? Revising the online loan application is certainly a step in the right direction.

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Disaster Loans for Economic Catastrophes?

Monday, October 13th, 2008

Senator John Kerry, Chairman of the Small Business and Entrepreneurship Committee of the U.S. Senate, recently introduced legislation that would treat the current credit crisis as a federal disaster. If passed, this legislation would enable the Small Business Administration to guarantee private low-interest loans to small businesses, along the lines of what is currently done with the SBA disaster loan program. Senator Kerry compared the recent events around the credit crisis to the extension of aid following the September 11th terrorist attacks which, he noted, put $2 billion into local economies. I am extremely skeptical of this proposal; it appears to me to be a sop to dilute criticism of a bail-out of Wall Street by appearing to redistribute aid to other constituents.

Recall exactly what did happen as a consequence of the 9-11 SBA programs: a 2005 Senate review found that many of the loans went to small businesses that did not appear to be harmed by the terrorist attacks. Only 15% of the cases reviewed by the Senator Kerry’s committee showed evidence of disaster-related losses; the remainder had insufficient or questionable documentation. The more egregious cases of small businesses receiving 9-11 disaster loan aid included the now-infamous doughnut franchise in Oregon, a Nevada tanning salon, a liquor store in Georgia and a golf course in Texas. I also note that this “aid” is provided on very different terms to small businesses than the disaster bail-outs routinely extended to large corporations: small business owners are personally liable for their liabilities and must provide personal guarantees. It appears to me as though the Senate Small Business and Entrepreneurship Committee failed to learn the lessons of 9-11 and of other failed disaster relief programs.

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