Back in Shape?

As the 2001 congressional session went down to the wire,Congress seemed certain to expand a post-September 11 initiativefrom the SBA. On October 19, the SBA announced it would offereconomic injury disaster loans of up to $1.5 million to any U.S.small business directly or indirectly affected by the attacks onthe World Trade Center and the Pentagon. Normally available only tobusinesses in primary and adjacent disaster areas, the loans, whichcan be used as working capital to pay for fixed costs (but not tocompensate for reduced revenue), carry an interest rate of 4percent. The SBA also said businesses in the primary disaster areaswould receive an extra 90 days to pay off existing economic injuryand 7(a) loans.

Sen. John Kerry (D-MA) and Rep. Donald Manzullo (R-IL), chairsof the Senate and House Small Business Committees, respectively,created the American Small Business Emergency Relief and RecoveryAct to provide broader relief, extending to businesses that mightnot qualify under the SBA initiative. The bill takes a tieredapproach, with small businesses located physically in or around theWorld Trade Center eligible for disaster loans under more favorableterms.