Federal Loans For Small Businesses Hit By Sandy
If you’re a business owner affected by Superstorm Sandy, you may be eligible for a loan from the U.S. Small Business Administration. WNPR’s Sujata Srinivasan reports from a FEMA Disaster Recovery Center in Bridgeport.
This room off the lobby at the Housatonic Community College in Bridgeport is now a FEMA Disaster Recovery Center – or DRC. It’s also where the Small Business Administration – SBA – meets with local entrepreneurs affected by Sandy. The superstorm devastated large parts of the east coast last week, and businesses in its path are reeling. And now, the SBA is stepping in with disaster loans. The limit is $2 million for property damage and economic injury. Rates are four percent if credit is denied elsewhere, or six percent when alternate funding is available. SBA Administrator Karen Mills is here from Washington, D.C.
“We are able to do 30-year loans at fairly low interest rates so that small businesses can get the help they need to do both physical repair and even if you don’t have physical damage, loans are available for working capital that a business may have lost because of slowdowns or shutdowns in their community.”
Mills says the agency will respond in 10 days to the three-page business application. If approved, she says funding will be given in five days or so. Collateral is required if available, but is not a condition.
“For small businesses, we really need to get them up and running quickly. And today we were down in Norwalk at a small business that had been really flooded up to shoulder level inside. So it will require a complete redo. In those cases, the SBA will be making direct loans, which don’t have the same requirements for collateral or paperwork.”
JoAnn and Tony Malinowski run Pop’s Grocery, their family store on Main Street in Bridgeport. They took out a $17,000 SBA loan last year after tropical storm Irene to help with damages of more than $75,000. This year their building, near Long Island Sound, was flooded up to six feet. JoAnn expects losses of nearly $150,000.
“We have basically lost everything in our business. We have so much physical damage. We have at least ten refrigerator freezers, we have a deli case, all of our actual structures, you know for grocery goods and things like that, everything’s under water. We need an entirely new floor. Our cash register, under water. Our lottery machine, flipped over, under water. I mean, a tremendous amount of loss that in order to rebuild is a lot of money and we just went through this a year ago.”
Like most mom and pop stores, the Malinowskis’ customers are also neighbors. For a business to get back up and going, the neighborhood must as well. Many Bridgeport homeowners are here today, filling out applications for home disaster loans. Yet even after customers start coming in, Tony says business will be tough. In addition to last year’s SBA loan, he’s paying for private insurance and basic FEMA flood coverage and in this economy, he’s barely breaking even.
“What we’re trying to look for is trying to get some grant money that we’re able to get ourselves back on our feet and evidently for the small business people they don’t give out grant money.”
The Malinowskis met Karen Mills, Sen. Richard Blumenthal, and Gov. Dannel Malloy at a press conference at the Disaster Recovery Center, before heading to fill out a loan application. Governor Malloy:
“The federal government may make some grants or a kind of combination grants and loans are a possibility. We don’t really know yet what the full complement of offerings the federal government will come up with in this particular incident. I mean the numbers of people between New Jersey, New York and Connecticut that have been adversely impacted is just staggering. So we’re going to work with them.”
In addition to Bridgeport, DRCs are located in Greenwich, New Haven, Old Saybrook and Groton; plans are underway to open more. The federal disaster declaration for physical and economic injury loans covers Fairfield, Middlesex, New Haven and New London countries as well as the Mashantucket Pequot and Mohegan Tribal Nations. Economic injury disaster loans are available to qualifying businesses and private non-profits in Hartford, Litchfield, Tolland and Windham counties. Businesses must register with FEMA before applying for an SBA loan either in person, via phone or online – which the SBA recommends – at fema.gov and sba.gov.
For WNPR, I’m Sujata Srinivasan.