Congresswoman calls out SBA for slow Sandy response
by Jess Berry
Oct 28, 2014 | 2593 views | 0 0 comments | 72 72 recommendations | email to a friend | print
After Superstorm Sandy hit two years ago, businesses across the five boroughs were destroyed, and due to failings from the Small Business Administration (SBA), many never recovered.

A report from the Government Accountability Office (GAO), presented at a press conference with Congresswoman Nydia Velazquez last week, found that after Sandy, the SBA on average took 45 days to process physical business disaster loans and 38 days for economic injury loans, both of which are supposed to be responded to within 21 days.

Velazquez said that the SBA was “overwhelmed and underprepared for Sandy,” saying that many businesses waited up to two months to get responses to their loan requests.

“If there is a time for the federal government to show up, it’s when a natural disaster strikes,” Velazquez said.

But the federal government did not show up, said Mark Schneider, who hosted the press conference at his business, Red Hook Winery.

Schneider showed up at the winery at 5 a.m. on Oct. 30 two years ago and found “complete devastation.”

Because of a friend who had gone through a similar disaster with Hurricane Katrina, Schneider knew to immediately start applying for loans through the SBA. By 11 a.m., he had applied for several personal and business loans.

“That process then took over eight months,” Schneider said. “I have a stack of paper. Every time that I would submit information, I would get a letter from a different case manager saying that they need further information.

“I kept submitting information, and in the end, after eight or nine months, they called one day and I said, ‘The amount of hours that I spend trying to manage this loan made my recovery less effective,’” he added.

At that point, Schneider withdrew his application. The fight was far from over, however.

“Subsequently, I received a letter from the SBA claiming that since I refused to give them further information, which I had given them 15 times, that they were reporting me to the IRS for refusing to give information,” he said.

In all, he said, it was a “pretty unpleasant experience.”

According to Velazquez, it is also an unacceptable one.

“In essence, the SBA’s lack of preparation robbed this community and these businesses of the help they so much needed at that time,” she said. “Many businesses shut down their doors, and so many others are still struggling to get back on track.”

Velazquez was particularly frustrated, considering the SBA has still not implemented disaster program reforms that were signed into law in 2008 after Hurricane Katrina, which were designed specifically to help the agency respond to catastrophic natural disasters like Sandy.

Those reforms included a number of programs that would provide bridge loans up to $25,000 with a 36-hour application approval period; short-term loans for $150,000; and additional lending capacity by private sector partners.

“While the agency assured us that they were working to improve the disaster program, it now is clear that they lacked a sense of urgency and did not take these reforms seriously,” Velazquez said.

She will be readdressing the legislation and calling for an oversight hearing of the SBA, and she hopes that this time, progress can be made in order to better service small businesses when the next disaster strikes.

“The issue here is that the SBA, as the primary agency that deals with disaster loans, has to be prepared in a timely manner,” Velazquez said. “Every study shows that when disaster strikes, those businesses must get assistance from the federal government in the first four weeks. After that, those businesses will suffer dramatically.”

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