Congress should reopen the Small Business Administration's disaster loan program to aid Sandy-damaged businesses, a Brooklyn congresswoman said Thursday, citing a new report on delays and other problems after the 2012 storm.
The SBA approved only 28 percent of disaster-loan applications from Long Island businesses hit by Sandy, compared to 42 percent of applications from all businesses affected by the Oct. 29, 2012 superstorm, the Government Accountability Office found in a report released Thursday.
Moreover, it took 111 days on average for businesses to receive SBA loans to help them rebuild, and 81 days to get loans for day-to-day expenses. The federal agency took 45 days to approve or deny applications, more than twice as long as its 21-day goal, the report found. Inadequate planning was to blame, the GAO said. The report looked at the SBA's performance in areas hit by the storm; it received roughly 15,000 applications from businesses in nine states and Puerto Rico, the majority from New York and New Jersey.
Businesses "needed financial assistance in days, not months," said Rep. Nydia Velázquez (D-Brooklyn). "The agency was caught flat-footed. . . . Given the GAO findings, New York's small businesses deserve another opportunity to secure assistance."
The SBA said it received 85,500 disaster loan applications from homeowners and businesses and has provided $2.5 billion in loans, including $513 million to 4,234 Sandy-hit businesses. Since Sandy, the SBA has raised loan limits, separated business and home loan processing tracks and streamlined its electronic application process, the agency said.
The agency stopped accepting new business disaster loan applications from Sandy-damaged businesses in spring 2013.
In Nassau County, the SBA approved $61.2 million in loans to 588 businesses, out of 2,113 applications. Suffolk County businesses received $26.4 million in 237 loans, out of 859 applications.
The SBA declined loans primarily due to applicants' "lack of repayment ability and credit history," the GAO found.
Many Long Island businesses never recovered from Sandy, said Julie Marchesella, president of the Nassau Council of Chambers of Commerce, adding that the SBA has rebuffed pleas to revise its lending criteria. "If you drive through Long Beach, Island Park and Oceanside, people just closed and walked away," she said.
The SBA has not revised its disaster-planning documents, the GAO found in its report. Unless it does so, the GAO said, the SBA "may be unprepared" for future disasters.