Measure Requires the Small Business Administration to Provide More Assistance and be More Responsive in the Wake of Disasters

(Washington, D.C.) – Today, Pennsylvania Congressman Patrick Murphy (D-8th District) voted to aid small businesses in the wake of disasters. The measure, known as the RECOVER Act, would require the Small Business Administration (SBA) to develop response plans for disasters, maintain disaster reserve corps, increase individual disaster loan limits and increase overall responsiveness by the SBA for small businesses across the country. Congressman Murphy voted for this measure because in the 8th District, small businesses may need assistance dealing with several kinds of disasters, not the least of which is damage caused by Delaware River flooding. This bill, which passed by a bipartisan margin, also requires the SBA to provide immediate assistance to any entrepreneur currently participating in a small disaster-relief loan. The RECOVER Act requires annual reports from the SBA to Congress on disaster assistance services provided.

“Small business is the life-blood of our local economy. By giving entrepreneurs added relief and protections, we can not only secure the businesses already in existence but encourage others to join the marketplace as well,” said Congressman Patrick Murphy. “Rain season is here and our 8th District businesses are at risk. Everyone hopes that we’re not hit with disastrous damage but if that is the case, this legislation will give small businesses some much-needed relief.”

The RECOVER Act:

• Requires the Small Business Administration (“SBA”) to develop a written disaster response plan and to maintain a disaster reserve corps of over 1,000 individuals;
• Creates an Associate Administrator for Disaster Assistance at SBA who would be responsible for maintaining the disaster plan and ensuring adequate training within SBA for disasters;
• Requires the SBA to impose a minimum possible deferment period of 12 months during which interest would continue to accrue on loans, and mandates that the repayment period begin when the final loan disbursement is made;
• Increases individual disaster loan limits from $1.5 million to $3 million;
• Authorizes new SBA disaster loans for incidents of national significance in coordination with FEMA;
• Provides immediate assistance to any entrepreneur currently participating in a small (under $25,000) disaster-relief loan and requires annual reports from SBA to Congress on Disaster Assistance services provided; and
• Provides the SBA with authority to offer grants of up to $100,000 for certain businesses that were severely affected by hurricanes Katrina, Rita or Wilma.

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For Immediate Release, April 18, 2007

Contact: Adam Abrams, (202) 225-4276