Landrieu Letter to SBA Urges Support for Gulf Coast Small Businesses

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.

Resources
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.

GoodBiz113's Take
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SOURCE: U.S. Senate Committee on Small Business and Entrepreneurship
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New Landrieu Amendment Provides Interest Relief for Small-Business Disaster Loans

Today, United States Senator Mary L. Landrieu [D-La., pictured], chair of the Senate Committee on Small Business and Entrepreneurship, announced her intention to introduce an amendment that would offer businesses with Small Business Administration [SBA] disaster loans from the 2005 and 2008 hurricanes, interest relief of up to $15,000. Sen. Thad Cochran [R-Miss.] has indicated he intends to co-sponsor the measure.

"Businesses along the Gulf Coast have faced some of the worst disasters this country has ever seen," Sen. Landrieu said. "To this day, many of these businesses are struggling to pay down loans made from the hurricanes in 2005 and 2008.

"Now, they are being faced with another disaster that is threatening their way of life once again. With the oil spill in the Gulf of Mexico impacting businesses in Louisiana and along the entire Gulf Coast, we have the opportunity to offer some relief.

"This amendment allows the SBA to offer interest relief to small businesses with existing loans. It is my hope that this amendment will be adopted quickly when the full Senate considers the Supplemental next week."

The proposal would apply to disaster loans made after Hurricanes Katrina, Rita, Gustav and Ike. SBA would be required to prioritize applications for businesses with 50 employees or less, and businesses impacted by the BP oil spill. Businesses would still be responsible for the principal and the remaining interest of their loans. According to loan data from the SBA, this program could potentially help up to 12,000 businesses.

This amendment is similar to a bill, S. 2986, the Southeast Hurricanes Small Business Disaster Relief Act of 2010 -- introduced by Sens. Landrieu, Cochran and Roger Wicker [R-Miss.] -- which was endorsed by the U.S. Chamber of Commerce this week. To read the letter of endorsement, go to: http://bit.ly/Chamber2986.

GoodBiz113's Take
What's good for America's 27.2 million small businesses is good for the entire country -- especially since we create 60-80 percent of all new jobs here.

Sen. Landrieu's proposal will help small businesses impacted by myriad forms of disaster, and deserves swift action -- before the next oil spill, hurricane, tornado, wildfire, etc., brings livelihoods to a far-reaching halt.

SOURCES: GovTrack, U.S. Senate Committee on Small Business and Entrepreneurship
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SBA Proposes Higher Surety Bond Guarantees to Help Small Businesses Secure Larger Contracts in Disaster Areas

This morning, the U.S. Small Business Administration announced that it has proposed changes -- including higher surety bond guarantee limits -- that will help construction and service-sector firms secure larger contracts for work in areas impacted by disasters; e.g, BP's Gulf Coast oil-spill disaster.

The proposed changes, which were published as part of a Proposed Rule in the Federal Register on April 26, include:

* For a non-federal contract or order up to $5 million, a bond guarantee may be issued if the products will be manufactured, or the services are performed, in the disaster area.

* For a federal contract or order up to $5 million, the performance site can be outside the disaster area if the contract or order will directly assist the disaster-recovery efforts.

* For a federal contract or order, the amount of the guarantee can be as much as $10 million at the request of the head of an agency that is involved in reconstruction efforts.

"These proposed changes are one more way we can help small businesses -- particularly in the construction and service sectors -- compete for and win critical contracting opportunities that help them grow their business and create jobs," said SBA Administrator Karen Mills [pictured]. "Additionally, these proposals would help spur economic growth and recovery in areas that have been hard-hit by disasters, bringing jobs and economic activity to a region at a time when it is needed most."

The proposed changes are related to the Small Business Disaster Response and Loan Improvements Act of 2008, which increases the eligible amount for contracts or orders related to a major disaster area. These proposals build on increases to surety bond guarantees made possible under the American Recovery and Reinvestment Act of 2009. The major disaster areas are identified on the Federal Emergency Management Agency website: http://www.fema.gov/.

Generally, the increased amounts would apply during the 12 months following the disaster declaration, unless SBA provides for an extension related to a particular disaster.

In addition to the disaster-related proposals, the Proposed Rule clarifies SBA’s position that it does not cover any costs related to insurance or indemnification requirements that may be contained in the bonded contract. It specifically excludes from the losses covered by SBA any costs that arise from the principal’s failure to secure and maintain insurance that result from any claims or judgments that exceed the amount of insurance coverage, and that arise from an agreement by the principal to indemnify the contractor or any other persons.

SBA partners with the surety industry to help small businesses that would otherwise be unable to obtain bonding in the traditional commercial marketplace. Under the partnership, SBA provides a guarantee to the participating surety company of between 70 and 90 percent of the bond amount.

Through its Surety Bond Guarantee Program, SBA also helps owners by guaranteeing bid, payment and performance bonds to protect the project owner against financial loss if a contractor defaults or fails to perform.

The Proposed Rule is available for public inspection at the Federal Register: http://bit.ly/ProposedRuleDisasters.

Comments on these proposed changes must be received on or before May 26, 2010, and can be submitted at http://www.regulations.gov/, or mailed or hand-delivered to Office of Surety Guarantees, Suite 8600, 409 Third Street SW, Washington, DC 20416. SBA will post all comments on http://www.regulations.gov/.

SBA assistance in locating a participating surety company or agent, and completing application forms, is available online. For more information on SBA’s Surety Bond Guarantee Program, including Surety Office contacts, go online to http://www.sba.gov/osg/, or call 1-800-U-ASK-SBA.

SOURCES: Library of Congress, U.S. Small Business Administration
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Landrieu Letter to SBA: Support Small-Business Owners Impacted By Oil-Spill Disaster

Yesterday, United States Senator Mary L. Landrieu [D-La., pictured], chair of the Senate Committee on Small Business and Entrepreneurship, sent the following letter to Karen Mills, administrator of the Small Business Administration [SBA], in support of small-business owners who may be impacted by the BP oil-spill disaster in the Gulf of Mexico.

* * *

April 30, 2010

The Honorable Karen G. Mills
Administrator
Small Business Administration
409 Third Street, S.W.
Washington, D.C. 20416

Re: Disaster Loans and Financial Relief for Small Businesses Impacted by the April 20th Deepwater Horizon Oil Spill

Dear Administrator Mills:

I write to urge the Small Business Administration [SBA] to make available as soon as possible SBA disaster loans and all other SBA assistance to small businesses in Louisiana impacted by the oil spill. This request is strongly supported by the Governor of Louisiana and other state leaders. In anticipation of a declaration, I ask that the SBA organize a lending briefing on the coast of Louisiana for the fishermen and other impacted businesses, and to coordinate with other federal agencies -- including the Department of Commerce [Commerce] and the U.S. Department of Agriculture [USDA] -- to make the recovery process as easy as possible.

As you know, a significant portion of my state’s businesses rely on the Gulf for their livelihoods, from shrimpers and oystermen to restaurants, processing plants, and shipping companies. With an estimated 5,000 barrels of oil a day spewing from the blown-out well underneath the Deepwater Horizon rig, it is urgent that SBA coordinate with the other agencies to assess the impact of the oil spill, issue the necessary declarations for businesses to access disaster loans, and make it as easy as possible for the harmed businesses to determine which agency will help them and how to apply.

Of particular concern is coordination between the SBA and USDA. In recent years -- for example, when Red Tide struck coastal communities in New England -- businesses have fallen through the cracks because SBA and USDA have not had clear policies about whether a fishing or shellfish entity is a business or a farmer, and therefore whether it is eligible for assistance through the SBA or the USDA. And, when it was eligible for assistance through the USDA, the assistance was more limited.

Following the 2005 and 2008 hurricanes, many Gulf Coast businesses also were deemed "too agricultural" for SBA and "not agricultural" enough for USDA, leaving them without sufficient disaster recovery assistance. I ask that you personally make sure that this process runs smoothly.

I also strongly support the State’s request to temporarily defer loan repayments for Louisiana coastal businesses that are impacted by the oil spill and have existing disaster loans, and am ready to help in any way to make that possible. To complement those deferrals, I ask for your support for legislation I have that would forgive a portion of the interest on outstanding disaster loans for businesses that are still struggling as Louisiana continues down the long road to recovery from the devastation of hurricanes Katrina, Rita, Ike and Gustav.

More specifically, S. 2986, the Southeast Hurricanes Small Business Disaster Relief Act of 2010, would create a program to waive up to $15,000 of interest on 2005 and 2008 small-business disaster loans. It would be available over a three-year period and have the effect of significantly lowering the monthly payments owed by small businesses, so that they would have needed capital to keep operating and retain employees.

Thank you, in advance, for your prompt cooperation on these requests. I look forward to working with you to make federal emergency assistance available as soon as possible to the businesses in my state.

Sincerely,

Mary L. Landrieu
Chair
U.S. Senate Committee on Small Business and Entrepreneurship

SOURCES: GovTrack, U.S. Senate Committee on Small Business and Entrepreneurship
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Sens. Landrieu, Snowe Call for GAO Investigation Into Small-Business Hurricane Recovery Efforts

U.S. Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu [D-La.] and Ranking Member Olympia J. Snowe [R-Maine] today wrote to Gene L. Dodaro [pictured], acting comptroller general of the U.S. Government Accountability Office, requesting a progress report on Gulf Coast small-business recovery efforts. The senators expect that the investigation will be completed ahead of the fifth anniversaries of hurricanes Katrina, Rita and Wilma in August 2010.

After the 2005 storms, "The region’s small businesses experienced massive losses that caused great harm to those businesses’ owners, employees and customers," Sens. Landrieu and Snowe wrote. "Federal assistance to small businesses has been, and continues to be, imperative for the region’s economic recovery."

The investigation is meant to focus on the Small Business Administration’s disaster loan program and state-administered business assistance programs funded by Department of Housing and Urban Development’s community development block grants. The senators also requested details on federal recovery contracts received by small businesses in the Gulf Coast region.

"We would also like you to provide information on the current state, and improvements in, the region’s small-business economy," the senators wrote.

For further details of the request, please view the letter here: http://bit.ly/7DeAT.

SOURCES: U.S. Government Accountability Office [photo], U.S. Senate Committee on Small Business and Entrepreneurship, Wikipedia
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President Obama’s Budget Overview Backs $28 Billion in Small-Business Credit for FY 2010

President Barack Obama’s FY 2010 Budget Overview offers full support for the U.S. Small Business Administration’s credit programs, authorizing SBA to support loan guarantees of $28 billion to small businesses.

The FY 2010 Budget Overview provides a broad outline of the President’s budget priorities -- including an appropriation for SBA of approximately $700 million. The full budget proposal with account level appropriation details is scheduled for release in April.

The spending cited in the broad proposal would be in addition to the $730 million funding provided for SBA credit programs in the recently enacted Recovery Act. That Act -- for which most spending is targeted for use in 2009 and 2010 -- authorizes SBA to raise guarantee percentages on some SBA loans to 90 percent, temporarily reduce fees on SBA-backed loans, expand funding for Microloans, and raise the maximum size of SBA-guaranteed surety bonds.

The bill outlines maximum authorization levels for SBA credit programs well above current demand for those programs. It sets a maximum of $17.5 billion for SBA’s 7[a] General Business Loan Guarantee program; $7.5 billion for the 504 Certified Development Company Loan program; $3 billion for the Small Business Investment Company [SBIC] debenture program; and $25 million for the Microloan program.

The bill also provides for $1.1 billion in direct disaster loans, and provides for the launch of a pilot program to test the use of SBA-guaranteed loans as part of the agency’s response to disaster declarations.

Aside from those credit provisions, the proposal:
* Sustains funding for the agency’s technical assistance and training programs
* Improves federal contracting data
* Continues reviews of small-business size standards to help improve targeting of federal contracting opportunities for small businesses
* Modernizes core agency information systems
* Streamlines loan processes
* Enhances human capital resources

The Budget Overview also includes the Obama Administration’s Small Business and Community Bank Lending Initiative, to expand small-business credit availability and affordability by unfreezing secondary markets for small-business loans as part of the larger plan to revive the flow of credit in the economy.

United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu [D-La.] and Ranking Member Olympia J. Snowe [R-Maine] today commented on the SBA components of President Barack Obama’s budget. They're hopeful the additional funding will be spent on the most vital SBA programs after the agency’s funding was cut by 28 percent over the last eight years -- the biggest cut of any federal agency.

“President Obama’s budget demonstrates that he will continue to make small-business recovery a top priority,” Sen. Landrieu said. “Increasing the SBA’s budget, coupled with $730 million for the agency included in the American Recovery and Reinvestment Act passed earlier this year, will put the SBA in a much better position over the next two years as it works to assist the nation’s small businesses and entrepreneurs. We have a long way to go to recover from the deep cuts of the last Administration, but this is an important step in the right direction.

“While we are still awaiting details on where the additional funding will be spent, I am hopeful that it will go to important programs, such as small-business lending, Women’s Business Centers, Small Business Development Centers, business assistance for veterans looking to start their own business, technical assistance for microbusinesses, and assistance to help small businesses -- many of them owned by women, minorities and veterans -- compete for and win federal contracts.”

“While I am disappointed that the President’s proposed budget for the SBA does not fully restore the funding cuts of the last eight years, it is a welcome and refreshing change from the previous administration’s SBA budget requests,” said Sen. Snowe.

“As former chair and now ranking member of the Senate Committee on Small Business and Entrepreneurship, I have seen the devastating effects of the SBA’s budget cuts on our nation’s small businesses,” Snowe added. “While I am withholding full judgment until I am able to review the complete Fiscal Year 2010 budget -- in order to see how President Obama recommends allocating additional funding -- I am pleased that a new emphasis has been placed on helping our nation’s true job generators succeed. It is critical that the additional funds be allocated in a manner that will bolster the SBA’s core non-credit programs.

“I will continue to review the overall budget with a particular emphasis on its potential effects on small businesses, to better determine its overall potential impacts on small businesses -- including addressing the small-business health insurance crisis, a top concern for small businesses across our nation.”

GoodBiz113's take: It's going to take awhile to recover from the Bush administration's virtual eight-year negligence of America's small-business needs. President Obama's FY 2010 budget marks a major leap for America's small-business owners and entrepreneurs -- the ever-growing backbone of our nation's economy. It delivers on his campaign's multifaceted plan to support small business and, from all indications, is just the beginning of good things to come. Thank you, Mr. President, for helping us to finally move forward.

SOURCES: Barack Obama and Joe Biden's Plan for Small Business, FinancialStability.gov, Recovery.gov, U.S. Senate Committee on Small Business & Entrepreneurship, U.S. Small Business Administration, WhiteHouse.gov
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