- The Washington Times - Thursday, October 24, 2002

Several local small businesses are still struggling 13 months after the September 11 attacks despite receiving more than $25 million in loans from the Small Business Administration to help them recover.
And many say the 3-week old sniper shooting spree is taking a toll on their already beleaguered operations.
"Getting the loan definitely helped us counteract losses we incurred," said Brian Berger, general manager for the Annapolis Hospitality Co. LLC, which owns Annapolis Grill in the District. "We had to open up the Grill a week after the opening date and lost about $20,000 just from changing the date."
The restaurant hasn't laid off workers or closed for an extended period of time since it received $65,800 from the SBA in February. But Mr. Berger said the recent sniper shootings around the region have slowed the recovery of his business.
"It's definitely been a tough year," he said.
The SBA has so far issued 289 low-interest disaster-relief loans to businesses directly affected by the terrorist attacks in the District, Arlington County, Fairfax County, Falls Church, Alexandria and Montgomery County, totaling $25.6 million.
That's a tiny sum compared with the $433.8 million in loans for New York City businesses or the other $498 million for businesses nationwide. But the SBA has expanded the deadline for applying for the loans, and Bill Leggiero, director of the SBA's Mid-Atlantic and Northeast disaster office, said loans could eventually total $40 million in the area.
"We continue to have a pretty steady stream of applications coming into us, but now it's down to maybe 10 a week," he said.
Small businesses 500 employees or fewer with a sales volume peaking at $5 million must prove a direct effect from the terrorist attacks, or from government actions following the attacks, to receive funding.
Strategic Technology Institute Inc. lost several lucrative federal contracts, including the Federal Aviation Administration and Pentagon, immediately after the attacks.
"Government was in chaos for a month or two after 9/11, and the loan we received helped us hold on to our technology base and keep from firing anyone" from the 15-person staff, said Rakesh Chopra, president of the independent risk-assessment company.
The company is still operating in the red, but Mr. Chopra said the $192,900 loan has kept the company from closing.
"It was only 30 percent of what we were asking for, but it really helped us stay on our feet," he said.
Wallace Felts, the president of Equalizer Electronics in the District, said his electronics company lost 20 percent of its government customers after the attacks, and 50 percent of overall business.
He said revenues fell by 40 percent and have not recovered, despite acquiring a $28,200 loan in January. "The loan got us by the skin of our teeth to stay open, but we're not in the clear," he added.
Julie Yates said she still hasn't obtained a $30,000 loan for her Springfield travel agency that was approved in November. The president of Four Directions Travel Inc. said miscommunication and problems with her personal credit rating have delayed the SBA from sending her the money.
"It's a very frustrating time," Mrs. Yates said. "I haven't had to close my doors yet, but it's disappointing that the SBA would fail to help me by just sending the money when I need it to keep going."
But an SBA loan officer said Mrs. Yates canceled the loan in July after refusing the initial loan size and payment plan. The loan officer, who asked not to be named, said that Mrs. Yates had reinstated her loan within the six-month period, and that the SBA was waiting for further paperwork to begin disbursing capital.
Lee Yesoon said quick turnaround saved her restaurant at Ronald Reagan Washington National Airport after it suffered three weeks of income loss from shutdowns and heightened security measures. The airport was closed for 23 days after the attacks, costing the local economy $5.5 million.
"The immediate support and low interest rates to pay back the loan helped us go on," said the president of Combined Food Services of Virginia Inc., which owns Chiang's Kwai at the airport.
Ms. Yesoon said she'll begin paying back the $91,800 loan in March.
"We've actually grown in customer size much higher than I expected," increasing sales 20 percent from six months ago, she said.
The SBA's Mr. Leggiero said the loan-approval process takes about two weeks from the time the application comes into his division. He added most businesses get the check within a month.
Businesses with financial problems before the attacks are not eligible, and the loans are based on the ability of the business to repay them.
More businesses that have applied in the last three months are putting their loans on hold up to six months rather than use them, Mr. Leggiero said.
"A lot of businesses look at it as sort of a last resort they have that they might use," he said.
"It's good for the owner to go ahead and get the loan now rather than wait until the last minute, because of the bottleneck of applications we expect as the new deadline rolls around."

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