United States Senator Mary L. Landrieu [D-La., pictured], chair of the Senate Committee on Small Business and Entrepreneurship, today sent a letter to Small Business Administration [SBA] Administrator Karen Mills, highlighting several initiatives aimed at assisting small businesses being impacted by the Deepwater Horizon oil spill in the Gulf of Mexico.
"As I write to you today, Gulf Coast small businesses continue to struggle with the growing economic impact from the disaster," Landrieu stated in the letter. "This is because, in addition to the current six-month moratorium on deepwater drilling, there is a ripple effect of the multiple fisheries closures, as well as a slowdown in tourism due to the oil spill.
"Depending on the season, up to 40 percent of the nation’s commercial seafood harvest comes from the Gulf of Mexico. The tourism and fisheries impacts of the disaster threaten the continued viability of our Gulf Coast restaurants, ice houses, processors, grocery stores, and other small businesses."
In her letter, Sen. Landrieu requested the SBA turn attention to the following federal assistance programs:
SBA Disaster Loan Interest Relief
In total, there are over 12,000 disaster loans outstanding from the 2005/2008 hurricanes with businesses who employ about 40,000 people. Landrieu requests the Obama Administration’s support for interest relief of up to $15,000 on outstanding disaster loans from the 2005 and 2008 hurricanes.
This proposal, intended to inject immediate capital into these businesses, is supported by the U.S. Chamber of Commerce and numerous Gulf Coast local governments and organizations. It has also been endorsed by the New York Times and the New Orleans Times-Picayune newspapers.
Collateral on SBA Disaster Loans
To date, SBA has approved 52 Gulf Coast oil spill-related Economic Injury Disaster Loans totaling $2.2 million. SBA has indicated that it will accept the "best available" collateral from businesses seeking disaster loans. This collateral could include personal real estate, equipment, or business property.
Landrieu presses SBA to examine different types of collateral that could be used and to not further burden businesses that are now, in some cases, facing their second or third disaster since 2005. She also urges SBA to coordinate with BP for borrowers interested in putting up their BP claims as collateral towards these disaster loans.
Reimbursement from BP
The Oil Spill Liability Trust Fund, established by the Oil Pollution Act, is available to reimburse federal agencies for operations related to response and compensation provisions after an oil spill. The SBA has increased its staff by 125 employees to respond to this disaster, and set up 28 Business Recovery Centers in the Gulf Coast. Landrieu requests that SBA contact BP to receive appropriate compensation.
Similarly, as the SBA disburses Economic Injury Disaster Loans to businesses and fishermen in impacted states, the agency should also seek reimbursement from BP for these loan amounts.
Lastly, local Small Business Development Centers [SBDCs] are currently assisting businesses with both the BP claims process and SBA disaster loan process. Landrieu pushes for SBA, in coordination with the SBDCs, to seek compensation from BP for these services being provided as a result of the Deepwater Horizon disaster.
On May 27, 2010, the Small Business Committee held a hearing on the impact of the Deepwater Horizon disaster on Gulf Coast small businesses. In that hearing, the Committee heard from members of the U.S. Coast Guard and federal agencies on the claims process and assistance available to small businesses.
To date, the SBA has approved 52 Economic Injury Disaster Loans. BP indicated at that hearing that they had received over 26,000 claims -- of which 12,000 claims have been paid -- totaling $36 million. To view complete coverage of the May 27th hearing, please visit: http://bit.ly/OilSpillHearingSBC.
On Thursday, June 17th, the Committee will hold a hearing highlighting the contracting process for proposals for the oil spill cleanup. Live video from the hearing can be viewed at http://sbc.senate.gov/.
To view a copy of Landrieu's letter, please go to: http://bit.ly/LetterOilDisaster.
For information about disaster-related contracting possibilities, visit SBA's Disaster Contracting Assistance Center: http://bit.ly/DisasterDCAC.
To glean consolidated information about federally funded government assistance to help all disaster victims -- e.g., businesses, families, individuals -- visit the new, one-stop DisasterAssistance.gov website: http://bit.ly/DisasterAssistance.
Anyone with damages to their business or home resulting from a declared disaster can apply for financial assistance via SBA's Disaster Assistance Electronic Loan Application: http://bit.ly/DisasterAssistELA.
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SOURCE: U.S. Senate Committee on Small Business and Entrepreneurship
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