Cochran co-sponsors bill streamlining SBA’s response time
by MBJ Staff
Published: March 4,2013
Tags: aid, assistance, bank, banker, banking, disaster, disaster recovery, disaster response, emergency, entrepreneur, Farrington Distinguished Entrepreneur Award, federal agency, federal government, finance, financial institution, legislative, loan, small business
WASHINGTON — U.S. Sen. Mary L. Landrieu, D-La., and Sen. Thad Cochran, R-Miss., have introduced a bill designed to make U.S. Small Business Administration (SBA) disaster programs more responsive to the needs of small businesses impacted by disasters.
The bill is also co-sponsored by Sen. Kirsten Gillibrand, D-N.Y., and Sen. Mark Pryor, D-Ark.
According to a release from Landrieu’s office, the Small Business Disaster Recovery Act, S.415, builds off of SBA disaster reforms that Landrieu enacted following Hurricanes Katrina and Rita of 2005 and the Deepwater Horizon disaster in 2010.
“Our goal is to make the government response to disasters more efficient and nimble. We’re offering commonsense, fiscally responsible proposals to make it easier for small businesses to reopen and get back to work following a disaster. This will help them keep people employed, provide vital services and stabilize the local economy,” Cochran said.
The Small Business Disaster Recovery Act has already received endorsements from the Association of Small Business Development Centers and the International Economic Development Council. It also has received support from the Southwest Louisiana Economic Development Alliance, the St. Tammany Economic Development Foundation, the Northeast Louisiana Economic Partnership and the Bay Area Houston Economic Partnership.
The bill would clarify that, for SBA disaster business loans less than $200,000, the SBA cannot use a business owner’s primary residence as collateral if there are other suitable business assets available to use as collateral towards securing the loan. This addresses instances where business owners were being required to put up a $300,000 or $400,000 personal home as collateral for a $200,000 disaster loan even though they had sufficient business assets to secure the loan.
It also authorizes SBA to allow out-of-state small business development centers (SBDCs) to provide assistance in presidentially-declared disaster areas. This addresses an issue that occurred after Hurricane Katrina and Hurricane Sandy in 2012 where local SBDCs were severely impacted but out-of-state SBDCs were not allowed, because of geographic limitations, to assist as their local counterparts got back on their feet. The concept is similar to how private sector utility companies share linemen after major disasters.
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