Nov. 3, 2001 — Local businesses affected by the Sept. 11 terrorists attacks are not necessarily shoo-ins for low-interest disaster loans, according to federal Small Business Administration officials.
In an unprecedented move, the SBA extended financial assistance on Oct. 22 to businesses affected by the Sept. 11 terrorist attacks - even those not located in the New York and Washington, D.C., areas. The economic disaster-loan program is available for eligible small businesses located outside the declared disaster areas of the World Trade Center and the Pentagon. Any eligible small business that can't meet its financial obligations or pay its operating expenses as a direct result of the attacks, or as a result of any related federal action taken between Sept. 11 and Oct. 22, may be eligible for assistance.
But Frank Adinolfi from the SBAs District II office, which covers the Virgin Islands, said businesses have to show they have been directly impacted by the attacks. As of Friday, he said, about 50 applications had been issued to individuals in the territory.
"Businesses must write a narrative telling how they were impacted by the disaster," Adinolfi said. "If it is just because people are changing their travel plans … we might have to take a closer look at things."
The loans, of up to $1.5 million with an interest rate of 4 percent for a maximum of 30 years, are intended only to provide the amount of working capital needed by a small business to pay its operating expenses until operations return to normal. The loans are not to cover lost income or lost profits, or losses attributable to an economic downturn. EIDL funds cannot be used to refinance long-term debt or expand the business.
Charlene Griffin, the SBAs representative in the territory, said it is important that applicants supply all the requested information, particularly past tax returns.
"We have to have a complete application to make an informed decision," she said.
According to the SBA website, the following criteria will be used to determine whether a business is eligible for assistance:
The business was located in an airport or other facility that was closed or suspended its operations or was otherwise disrupted as a result of national security as mandated by the federal government.
The business supplied or provided services to a business that was located in or near the World Trade Center or Pentagon; or supplied or provided services to a business or industry adversely affected by the destruction of the World Trade Center or damage to the Pentagon on Sept. 11, or federal action; or is otherwise dependent on a business or industry so adversely impacted.
The business is dependent on a business or other organization that was closed or suspended its operations or was otherwise disrupted as a result of the attacks or subsequent federal action.
The business was directly impacted by the destruction of the World Trade Center or damage to the Pentagon or related federal actions taken in response to those actions between Sept. 11 and Oct. 22.
The SBA noted that a general decline in business since Sept. 11 does not qualify for this program. A decline in revenue due to public reaction in the wake of the attacks is not covered by the program, according to the SBA.
Businesses in the territory interested in applying for economic disaster loans should call 1-800-659-2955 to request an application. The application deadline is Jan. 21, 2002.