Good afternoon Chair Landrieu, Ranking Member Snowe, and members of the Committee. Thank you for inviting me back to discuss SBA’s continuing efforts to help small businesses affected by the Deepwater Horizon oil spill. Chair Landrieu, I want to thank you for speaking on this issue at National Small Business Week and for your overall leadership in our response efforts.
Many small business owners who earn their living fishing in the Gulf—as well as seafood retailers, boat yards, shipping companies, processing plants and other coastal small businesses—are facing significant financial losses from having to shut down operations. The SBA has undertaken several efforts to help these small businesses survive and make it through these tough times.
First, we have set up a network of 28 outreach centers throughout the Gulf Region to provide individual assistance to small businesses. We currently have 13 in Louisiana, 5 in Mississippi, 2 in Alabama, and 8 in Florida. We have deployed 55 staff in Louisiana, and 32 in Mississippi, Alabama and Florida. These are experienced customer service representatives – many of whom speak two or more languages. They have already met with hundreds of small business owners, and they’ve answered hundreds more phone calls from small business owners who are interested in applying for Federal and state assistance.
Already, we’ve started approving our first Economic Injury Disaster Loans, which can help small businesses meet ordinary and necessary operating expenses. These loans offer working capital of up to $2 million, with a low 4 percent interest rate and terms up to 30 years to businesses that cannot obtain credit elsewhere. We are currently turning around these loan applications within 5 days in the Gulf Region, which is well within our overall goal of 18 days, and a dramatic reduction from our turnaround times during Katrina.
Another step we have taken is to allow existing SBA disaster loan borrowers to request a deferment. If a small business has been current on their existing SBA disaster loan for the past 90 days, we are granting them up to 12 months of deferment. Thus far, SBA has issued 64 deferments for those who’ve suffered both from a hurricane or other previous disasters, in addition to the Deepwater Horizon oil spill.
In addition, we’re working closely with our network of resource and lending partners. For example, we’re strongly encouraging the lenders who participate in our 7(a) and 504 guaranteed loan programs to offer deferment relief to businesses that have been impacted. We are also coordinating with Small Business Development Centers in the Gulf Region, many of whom are co-located at our outreach centers. They’re helping to assist fisherman and other small businesses in filing claims and obtaining other assistance.
And I should note that while we are working in the Gulf Coast today, our 1,400 employees and our reserve force of over 2,000 are responding to 47 other disaster declarations, including the flooding in Tennessee where we are co-located with FEMA in 30 disaster recovery centers.
We firmly believe that our ability to respond effectively to disasters is a direct result of the improvements SBA has made internally. Over the past few years, we increased the number of workstations from 300 to over 1,750 in our Fort Worth facility, where we’ve added 25 loan officers and a 10-person legal team who are solely dedicated to the oil spill. I should also mention that we’ve also invested in technology that allows borrowers to apply online, and about one-third choose this method.
Although our response has been quick, effective, and thorough, we know our persistence will be paramount. We are not letting up, and both the Administrator and I are committed to getting the job done right.
I look forward to further describing these efforts and to answering your questions. Thank you.