- The Washington Times - Friday, September 30, 2005


Despite promises of a swift response to Hurricane Katrina, the U.S. Small Business Administration didn’t deliver any loan checks to companies in the disaster zone during the first month after the hurricane, according to records obtained by the Associated Press.

The SBA handed out 950,000 applications for disaster loans, received 26,100 responses and approved just 142 loans without cutting any checks as of Monday — the one-month anniversary of Katrina’s landfall, the records show.

SBA officials said they expect the pace of approvals to pick up and the first checks to begin arriving to businesses soon. They blamed the delay on damaged roads, continued flooding and other obstacles that made travel in the Gulf region more difficult.

“Compared to other disasters we’ve worked with, this is unprecedented,” said Carol Chastang, an SBA spokeswoman.

But a key Democrat on the House committee that oversees the agency said Thursday that the agency’s response isn’t good enough, falling short of its original promises.

“This is really a disaster,” said Rep. Nydia M. Velazquez of New York, the top Democrat on the House Small Business Committee. “These businesses need help.”

The slow pace has also begun to frustrate businesses in the region.

“How long do you think it’ll take me to get any help?” asked Richard Harris, an Ocean Springs, Miss., general contractor who said he is so discouraged by the federal response so far that he doesn’t think he’ll waste time applying for an SBA loan.

“Looking at these numbers, what do they tell anyone who’s got any common sense? Everything you’re seeing is just too little, too late,” said Mr. Harris, who testified before a Senate committee earlier this week.

Mrs. Velazquez sent a letter to President Bush earlier this week, questioning whether a new computer-tracking system and SBA staff cutbacks have impaired the agency’s ability to respond to Katrina.

SBA Administrator Hector Barreto, however, dismissed reports about the agency’s computer problems as “misguided,” and insisted his staff was doing a “magnificent job.” When the storm first struck, the SBA vowed “we will be swift in our efforts.”

Miss Chastang said the agency has hired hundreds of local Gulf Coast residents to help with the relief effort. Roughly 250 applications for a total of $12.6 million have been approved since early this week, she said. Miss Chastang, however, said she couldn’t immediately say if any checks were delivered since Monday’s one-month anniversary.

She said one problem is that the process for approving physical injury loans for property damage in a Hurricane is lengthier than the process for approving economic-injury loans such as those made in droughts or terror attacks.

When approving an economic-injury loan, she said, a company simply has to provide financial documents showing that it has been economically damaged by a disaster. A physical-injury loan, however, requires an assessment of actual property damage and much more documentation, she said.

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