News From the
Committee on Small Business
Nydia M. Velázquez, Ranking Democratic Member



For Immediate Release
September 11, 2006

CONTACT: Kate Davis (202) 225-4038

Five Years Later, and the Federal Government is No Better Prepared to Assist Small Businesses Following Terrorist Attacks
Velázquez highlights need for changes to ensure full recovery for small firms after attacks

WASHINGTON - As the nation observes the five year anniversary of September 11 today, Congresswoman Nydia M. Velázquez (D-NY), Ranking Democrat on the House Small Business Committee, took a moment to recognize how the thousands of impacted small businesses have fared over the past five years. Based on the countless challenges facing many of these entrepreneurs today, and the administration's failure to implement changes to improve the government's response, she highlighted that the federal government is no better prepared today then they were five years ago to handle the economic impact following terrorist attacks.

"Small businesses required a response that truly met their unique needs following this type of disaster," Congresswoman Velázquez said. "Until this administration recognizes that change is essential, and takes the necessary steps to rectify the existing shortcomings, our nation's economic security - and the viability of our small businesses - remains at risk."

The terrorist attacks of 9/11 harmed both small businesses in New York City and nationwide. In fact, a large number of New York City firms continue to struggle today. Many have yet to reach pre-9/11 business levels due to a loss of customers, existing street closures and other economic hardships. Firms nationwide also felt the ripple-effect of diminishing business, particularly in the travel and tourism industries. These persisting issues are partly due to a host of problems in the government's response for entrepreneurs after 9/11. For example, disaster loans were not coordinated with other forms of assistance, which caused confusion and in many cases, a delay for those businesses waiting to receive funding. There was also a lack of consideration for both the immediate and future economic impacts that would result for small businesses, resulting in a number of firms never re-opening or continuing to struggle. In addition, collateral and repayment terms were not structured in a way that was conducive to the unique nature of the terrorist attack, leaving many without sufficient assistance. Ultimately, 54 percent of small businesses seeking assistance to recover and maintain their ventures were turned away after the terrorist attacks of 9/11.

"The fact of the matter is that the administration's one-size-fits-all approach to assistance does not work for this nation's small businesses in times of disasters, such as 9/11," Congresswoman Velázquez said. "These types of problems only deterred the recovery of our small businesses after the terrorist attacks, and we simply cannot afford to let this happen again in the future."

Congresswoman Velázquez called on the Bush administration today to enact a series of changes in order to improve the future response for small businesses. She highlighted the need for greater flexibility in the types, and terms of assistance provided to impacted businesses to better meet their needs following these unique situations - as well as a specific and separate set of guidelines for responding to terrorist-related disasters. In order to fully address small business needs during these times, a two-tiered approach that focuses on both businesses' stabilizing, as well as their long-term growth needs, was recommended in order to ensure entrepreneurs get the assistance they need to make a full recovery.

"It is deeply concerning to know our federal government is no better off than they were five years ago to assist the economic engines of this nation - small businesses - after a terrorist attack," Congresswoman Velázquez said. "With the continual risk of terrorist attacks, the administration needed to take steps immediately to implement a response that addresses the unique circumstances small businesses face following a disaster such as 9/11. Until then, both our entrepreneurs and the U.S. economy will continue to be in jeopardy."

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