SBA Can't Match VEDA's Speed In Disasters
The Small Business Administration recently held meetings in Waterbury and Wilmington, the Vermont towns that experienced the most serious damage to their business districts when Tropical Storm Irene hit.
Homeowners can qualify grants to help pay the costs of Irene repairs. There is little grant money available to businesses, so many sought disaster assistance loans.
The SBA was one main source of loan money. Another was the Vermont Economic Development Authority.
VEDA has been praised for the speed with which it extended loans after Irene. The SBA? Not so much. While some businesses say the SBA loans were critical to their ability to survive, many thought the process was long and cumbersome. The SBA says it’s taken the feedback to heart and streamlined the process.
Vermont Congressman Peter Welch, who organized the meetings, said making loans available quickly is important in the wake of a disaster like Irene.
“The critical challenge for small business is in that immediate time after the event,” Welch explained. “If they can’t get back into business very, very quickly basically the cash flow dries up, customers go away. One of the challenges we had with the SBA loan is the need to get a quick turnaround.”
SBA associate administrator Jeanne Hulit said the process can be made less cumbersome, but the need to comply with federal regulations will always mean that the SBA won’t be able to respond as quickly as VEDA.
Speed wasn’t the only difference between the SBA and VEDA loans. VEDA loans came with more favorable rates and terms.
The SBA approved loans to 80 Vermont businesses damaged by Irene.
In contrast, VEDA approved 307 loans to non-agricultural businesses and another 45 to farm related businesses.
VEDA says to date 34 loans have been pain in full, two have defaulted and another eighteen are classified as doubtful.