Small Alaska businesses are now eligible for federal economic injury disaster loans stemming from the Sept. 11 terrorist attacks.
The U.S. Small Business Administration recently announced access to the loans was being widened to small businesses across the country.
The program provides funds to eligible small businesses to meet their ordinary and necessary operating expenses obligations they could have met under ordinary circumstances, but are unable to meet as a direct result of the destruction of the World Trade Center or damage to the Pentagon, or as a direct result of any federal action taken between Sept. 11 and Oct. 18.
The purpose of the loans is not to cover lost income or profits, but to provide working capital, according to a press release from the Alaska Small Business Development Center, a partnership of Small Business Administration and the University of Alaska.
"We have had a few inquiries," said Small Business Administration public information officer Ron Veltkamp in Anchorage. "I think we are getting more questions about a general decline in the tourist business in Alaska, and this program would not cover that because you must demonstrate direct impact."
Some of the inquiries Veltkamp has fielded include hearing that venture capitalism financing sources are drying up and that restaurants close to military bases are having less business from service personnel because of heightened security.
"Interrupting the flow of a business for five or six days (as in the federal closing of airports and flight schools after Sept. 11) can be pretty drastic for a business," Veltkamp said. "I spoke to a big game guide whose clients either didn't get to Alaska before Sept. 11 or were trapped in Anchorage and couldn't get out to their hunt. Other businesses had cancellations," he said.
Rick Jenkins, public information officer with the Sacramento, Calif., office, said about 45 applications were sent to Alaska businesses.
"Inquiries are coming from a wide variety of businesses, including transportation, support, wholesale, and retail." None of the loans has been approved yet, Jenkins said, but that is to be expected.
Jackie Stewart of the Juneau development center office said it provides ongoing updates and access to information about the disaster loan program. The Juneau office is at 463-3789 and more information is available at the Web site www.sba.gov.
The maximum interest rate for the loan program is 4 percent. Loans of $5,000 or less do not require collateral. The loan limit is $1.5 million. Borrowers of all secured loans must purchase and maintain full hazard insurance for the life of the loan. Applications should be addressed to Small Business Administration's Disaster Area 4 Office in Sacramento, Calif., (800) 488-5323. The filing period ends Jan. 21.
So far, the Small Business Administration has approved more than $100 million in disaster loans to businesses and individuals in New York City, administrator Hector Barreto announced Nov. 12. As of that date, the administration had approved 30 disaster loans totaling more than $4.8 million in the disaster area around the Pentagon.
Ann Chandonnet can be reached at email@example.com.
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