WASHINGTON -- Small businesses need grants, not loans, from the federal government as they try to recover from damage, closures and lost business caused by superstorm Sandy, Long Island Association president Kevin Law told a U.S. Senate panel Thursday.

Small businesses need cash now, and laws should be changed to allow the thousands of businesses damaged on Long Island to access federal grants just as homeowners can do now, Law told the Senate Committee on Small Business.

Law said the U.S. Small Business Administration has given money to relatively few of the several hundred Long Island businesses that have applied for loans. The most recent numbers show approvals of a total of $3 million for 31 businesses.

"Many stores, restaurants and small businesses throughout Long Island were damaged and some even destroyed," said Law, who was invited to testify by Sen. Kirsten Gillibrand (D-N.Y.).

"However, almost all the federal money that is available to small businesses is in the form of loans," he said. "After this storm and in this economy, small business owners are resistant to taking on more debt."

Sandy destroyed far more businesses in the Northeast than the 18,700 businesses wrecked on the Gulf Coast by Hurricane Katrina in 2005, said Sen. Mary Landrieu (D-La.), the committee chairwoman.

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New York lost 265,000 businesses while 189,000 were destroyed in New Jersey, Landrieu said.

So far, the SBA has approved more than 3,000 applications for a total of $192 million, cutting processing times to 14 to 18 days from 60 to 70 days after Katrina, James Rivera, SBA associate administrator for disaster assistance, said.

Landrieu expressed impatience with the SBA focus on process instead of results. She said only $6 million of the approved loans actually have been disbursed to businesses.

In New York, 105 loans have been approved and money for 12 has been disbursed at an average amount of about $13,000, Landrieu said. That is much less than loan disbursements after previous hurricanes, almost all of which averaged more than $100,000, she said.

"It is impossible for these communities to recover without small businesses leading the way. It's just not going to happen," Landrieu said.