U.S. Outlines New Quake-Aid Plan for Firms
Quake-damaged businesses--even those that have been denied loans by the Small Business Administration--may be eligible to receive money and help with their debts under a $30-million federal program outlined Thursday by Commerce Secretary Ronald H. Brown.
“The funds will fill a financial void created by the Northridge earthquake,†Brown said. “Small businesses will be able to access the necessary capital that is at the center of their recovery and expansion plans.â€
Speaking in Encino to a group of about 60 representatives of nonprofit organizations, lenders and community leaders, Brown presented the Competitive Communities Across America program, which he described as a non-traditional approach to assisting communities that redefines the role of the federal government in propelling local economic growth.
“We’re trying to be creative and dynamic in our approach,†Brown said.
The pilot program, for communities in Ventura and Los Angeles counties that were heavily damaged in the Jan. 17 disaster, relies on the knowledge and skills of nonprofit community-based organizations, Brown said.
Under the program, the Commerce Department’s Economic Development Administration will select nonprofit organizations or “intermediaries,†which will receive federal grants to establish revolving loan funds.
Based on the specific needs and goals of their communities, the intermediaries will provide loans to selected businesses and help them restructure debts. The intermediaries will specifically try to help businesses that have the potential for growth and to create employment opportunities, but may be deeply in debt, including businesses that sought but were denied SBA quake assistance, officials said.
“A lot of these companies have fallen between the cracks,†Brown said.
The program will also bring together public, private and nonprofit organizations to set priorities and strategies for their communities.
“We have a very results-oriented approach that is very measurable and monitorable,†Brown said. “It is . . . a new approach that acknowledges that sustained economic growth is not going to take place without the private sector.â€
Although businesses affected by the quake will benefit from the program, others will be eligible to apply as well, said Carol L. Hamilton, Brown’s press secretary.
Those attending the meeting included San Fernando Valley business leaders and executives of nonprofit groups as well as representatives of First A.M.E. Church, the Brotherhood Crusade, and other businesses and organizations from throughout Los Angeles County.
Officials in east Ventura County, which suffered heavy damage in the quake, welcomed the secretary’s plans.
“The SBA is not generous in any way, shape or form,†said Simi Valley Mayor Greg Stratton. “They’ve been very professional in the sense that they’re only loaning to people that can pay it back.â€
In Fillmore, where the earthquake damaged one-third of the business district, City Manager Roy Payne said the loan plan “sounds like good news.â€
Payne said the SBA has been selective in doling out loans in Fillmore, Payne said, rejecting applications for loans that would improve stagnant cash flow, add new moneymaking elements to sluggish businesses or do just about anything other than let businesses reopen.
“I’d have to see what the terms and conditions are of the funding,†Payne said. “But any assistance to businesses that will give more flexibility to them is certainly welcome.â€
The deadline for nonprofit organizations to apply for the program is July 31 and the selections will be made in August, Hamilton said.
The Economic Development Administration will hold community forums to introduce the programs to interested organizations.
The launch of the Southern California program is part of a larger effort by the Commerce Department to promote competitive businesses in “economically distressed areas,†Brown said.
Sometimes the rising economic tide doesn’t lift all boats, Brown said.
“We want to make sure that as opportunity expands, everybody benefits,†he said. “There are a lot of folks out there that don’t have any boats.â€
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