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Disaster Aid
The Committee on Small Business and Entrepreneurship oversees the federal government's disaster loan program. The Small Business Administration is responsible for disbursing disaster loans to both individuals and small businesses affected by a disaster. Disaster declaration can be made after hurricanes, earthquakes, tornadoes, winter storms, or terrorist attacks. After Hurricanes Katrina and Rita devastated the Gulf Coast in 2005, the inefficiencies and mismanagement of the program received national attention and warranted Congressional action. As a result, in the 109th and 110th Congresses, bipartisan legislation to reform and improve disaster assistance to business owners and homeowners passed the Senate in various forms. Most recently, the Small Business Disaster Response and Loan Improvements Act (S. 163) passed which establishes a Private Disaster Loan program to allow banks to make loans directly to victims. The bill also creates a new expedited disaster assistance business loan program and designates a new presidential declaration of "Catastrophic National Disaster," which will allow the Small Business Administration SBA to issue nationwide economic injury disaster loans to small businesses affected by a large-scale disaster. To speed up the response time, this legislation provides key tools for processing disaster loan applications more quickly, and increases the maximum size of a disaster loan from $1.5 million to $2 million.
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