Washington, DC – Today, U.S. Representative William Jefferson (D-LA) introduced two bills that would amend the Small Business Act to allow greater relief for homeowners and business owners after catastrophic disasters like Hurricane Katrina.  The “Disadvantaged Business Disaster Eligibility Act of 2007” is aimed at extending eligibility for the SBA’s disadvantaged business program when businesses face long-term interruptions after a disaster; while the “Small Business Disaster Loan Improvement Act of 2007” seeks to make minor changes in disaster loan repayment requirements to ensure that consumers are able to make the most of their rebuilding efforts.

“These bills seek to address some fundamental problems in the way the SBA works for our people back home,” Jefferson said.  “Unfortunately, we have been faced with roadblocks in current laws that are handcuffing our homeowners with stiff repayment requirements, often leaving them without the means to rebuild.  Our disadvantaged business owners are also facing challenges as many of them were displaced or faced long-term interruptions, not allowing them to fully appreciate the SBA’s disadvantaged business program. These bills seek to make the road a bit easier.”

The “Disadvantaged Business Disaster Eligibility Act of 2007” would provide an 18-month extension on the nine year eligibility for businesses enrolled in the 8 (a) contractor program prior to August 29, 2005, or at the time of a future catastrophic disaster.  In this case, if a business is interrupted for an extended period, the program is still available and owners are able to take full advantage of the program’s benefits.  

The “Small Business Disaster Loan Improvement Act of 2007” will allow homeowners to receive SBA disaster loans, in addition to insurance proceeds and/or grants such as Louisiana’s Road Home Grants.  Under current law, the Road Home Grant is considered a “duplication of funds” so homeowners have been required to use their grants to pay off SBA loans, further complicating a very difficult recovery.  The bill also allows those who paid off their mortgages after a disaster to be eligible for SBA loans – whether they did so voluntarily or involuntarily.  Under current law, the SBA finds homeowners who choose to pay off their mortgage loans ineligible.

“Our homeowners and business owners have been victims of devastating storms and poor federal policy,” Jefferson said.  “These bills will go a long way to help our citizens recover and prevent logjams like we’ve seen in the SBA from happening in the future.”