Standard SBA aid to business is limited to loans, unhelpful for many already indebted businesses

Bayville, NY—Today, Congressman Steve Israel (D-Huntington) joined Gerianne Reilly who owns Over the Bridge, a small garden and gift store in Bayville, to call on New York State to use federal Sandy Aid funds from the Department of Housing and Urban Development (HUD) to help small businesses that are suffering as a result of Hurricane Sandy. Ms. Reilly’s store suffered extensive property damage during Hurricane Sandy, in addition to the loss of thousands of dollars in merchandise. While she was eligible for a Small Business Administration (SBA) loan, she cannot afford to take any more loans without becoming overleveraged. Specifically, Rep. Israel is calling for community development HUD funds to be used in part for small grants to small businesses as was done following Hurricanes Rita and Katrina.

Rep. Israel said, “Almost four months after Hurricane Sandy hit, many of our small businesses are still trying to pick up the pieces. While small business owners like Gerianne Reilly have done their best to make up for lost revenues and damage to their business and inventory and were eligible for government loans, we should do better than just offer them a loan. That’s why I’m calling on New York State to use federal Sandy Aid funds to help these businesses once again thrive and continue to give back to our communities.”

Ms. Reilly said, “As a small business owner who suffered significant financial hardship as a result of Hurricane Sandy, I found it frustrating that the only option for financial help was a government loan. I wrote to Congressman Israel to ask him if it would be possible to allow small businesses suffering due to Sandy to receive a grant as part of the Sandy Aid package. I thank the Congressman for calling on New York State to make this request a reality.”

As part of the $50 billion Sandy Aid package that was signed into law late January, $16 billion was allocated for Community Development Block Grant (CDBG) Disaster Recovery funding. This type of funding gives grantees significant flexibility in how best to use their funds to meet the greatest unmet needs.

The funding is allocated in stages to individual states and localities, which must then submit an action plan to the detail how the funds will be used specifically.  New York State was allocated about $1.7 billion in its first stage of CDBG funding on February 6th and now has less than 90 days remaining to submit an action plan to describe how funds will be used. Rep. Israel called on the state of New York to include grants to help small businesses in the plan, so businesses like Over the Bridge can get the financial help they need.

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