From the Office of Senator Kerry

Wednesday, February 28, 2001

WASHINGTON, D.C. - The Senate Small Business Committee today unanimous passed the Kerry bi-partisan Small Business Energy Emergency Relief Act of 2001. This legislation will provide emergency relief, through affordable, low-interest Small Business Administration Disaster loans, to small businesses adversely affected by significant increases in the prices of heating fuels -- heating oil, propane, kerosene, and natural gas. Today, by amendment, the Committee also added electricity to the fuels that are covered. Kerry said, "We've taken the first step towards providing immediate relief directly to where it's needed. Sky high heating fuel bills are hurting our small businesses and strapping the capital flow of one of the most reliable engines of economic expansion, small businesses. This legislation is now headed to the floor so we can finish the job."

To mitigate or avoid serious losses caused by price jumps, small businesses need access to capital -- but commercial lenders typically won't make loans to such small businesses because they often don't have the increased cash flow to demonstrate the ability to repay the loan. Economic injury disaster loans give affected small businesses necessary working capital until normal operations resume, or until they can restructure or change the business to address the market changes.

To be eligible for an economic injury loan, the applicant must be a small business, have used all reasonably available funds, and must be unable to obtain credit elsewhere. Small businesses will have six months to apply for these loans, from November 1, 2000 or, for future disasters, from the day a disaster is declared.

The bill is expected to come to a vote on the Senate floor next week.

Senator Kerry is the ranking member of the Senate Small Business Committee.