Loans from SBA to ease fire losses

Loans from SBA to ease fire losses

Sept. 19, 2000

By Janelle Holden
Journal Staff Writer

Four Corners small businesses that suffered a drop in summer sales are being offered some economic relief this year.

The U.S. Small Business Administration announced on Monday that it would offer loans of up to $1.5 million to small-business owners who suffered a substantial loss of income because of wildfires that occurred from July 20 through Aug. 14.

The low-interest loans are available for actual disaster-related financial needs for businesses in Montezuma, Dolores, La Plata, and San Juan counties in Colorado; San Juan County, Utah; and San Juan County, N.M.

The loans are to help businesses meet installments on long-term debt, accounts payable, and overhead expenses that ordinarily would have been met except for the Bircher and Pony fires, which closed Mesa Verde National Park for nearly three weeks in July and August.

SBA is offering 4-percent interest and the terms of the loan may extend up to 30 years, depending on the business’ repayment abilities. Refinancing of long-term debt, however, is not eligible. In addition, these loans are not intended to cover physical damages resulting from the disaster, but rather as a supplement to funds the business owner can provide from other sources.

The Colorado Disaster Office of the Department of Local Affairs, the city of Cortez, Montezuma County, and the Montezuma County Economic Development Council held meetings throughout the area for concerned small-business owners last month.

Bill Argo, director of the MCEDC, said that they collected questionnaires from 20 to 25 interested business owners at the three meetings. These questionnaires were then forwarded to Gov. Bill Owens, who wrote a letter to SBA on their behalf.

"This is a unique opportunity for a business person," said Argo. "Most of the time these loans are for people who lose their homes to a fire, or a business to a fire or a flood. This loan is for an economic disaster."

Merlyn Barnes, spokeswoman for the SBA, said the loans will be immediately available for businesses as soon as they are approved and closing occurs. Business owners will be assigned a loan-closer to assist them with closing. Barnes said that the loan applications will be evaluated based on a business’s history, and the dip in sales during the fire.

The deadline for filing an application is June 14, 2001. The SBA will open a temporary workshop at the Cortez Cultural Center, 25 N. Market St., to help business owners complete their loan applications. The center will be open Tuesday through Saturday from 9 a.m. to 6 p.m.

Depending on interest, the workshop may stay open past Saturday. Loan applications can be obtained by calling the SBA toll-free number, 1-800-366-6303 or TDD 817-267-4688, for the hearing-impaired.

Jim Reser, director of the Small Business Development Center in Durango, said he and students in his management consulting class at Fort Lewis College planned to help local businesses fill out applications as well. Reser said it’s important to keep in mind that these loans are only for needed expenses that had to be met whether sales were made or not.

"This disaster relief is going to be a help, but there’s no way to compensate for the two years’ worth of damage to the memories of people who canceled their vacations and are afraid to come back to a blackened park," he said.