The Small Business Administration recently announced that it has funded over $1 billion in disaster relief loans for victims of Hurricane Sandy in New York State, touting the approval of more than 15,000 low-interest loans to help residents and business owners get back on their feet after getting slammed by the powerful late October storm.
But an analysis of loan data for five zip codes in Southern Brooklyn, an area that includes some of the hardest hit neighborhoods in New York City, shows the federal agency has funded less than 30 percent of the applications for home and business loans it has received.
Business owners in the area, and across Brooklyn, have been frustrated by what they argue is SBA’s slow response to loan requests in the aftermath of a storm that caused an estimated $20 billion in damage in the five boroughs.
And while business owners tell a different story, Andre Ledgister, a spokesman for SBA, said the agency was processing loans in an average of 21 days.
“We’re asking that everyone be patient as we process the large number of applications form this disaster,” Ledgister said, adding that SBA has approved 2,080 disaster loan applications in Brooklyn worth over $101 million. This includes nearly $68 million in loans in Southern Brooklyn.
SBA provides disaster loans to homeowners, renters, nonprofits and businesses. After Sandy, the agency sent out nearly 23,000 loan applications in the zip codes 11229, 11235, 11224, 11223 and 11214, which cover neighborhoods like Sheepshead Bay, Coney Island, Gerritsen Beach, Brighton Beach and Gravesend.
Residents and business owners in those zip codes filed 4,650 loan applications and 1,344 have been funded, for a rate of 29 percent, according to data provided to Sheepshead Bites by SBA in late February.
Alan Chavez, a spokesperson for SBA, said the agency sent out applications to “almost everybody that was damaged” by the storm, trying to cast a wide net in the badly battered neighborhoods. But Chavez said many residents and businesses in the area decided not to apply to SBA for loans.
“Some people decided not to use it,” Chavez said.
Still, among those who did apply, the funding rate was below 30 percent.
“I’m extremely disappointed in hearing those numbers,” said Assemblyman Steven Cymbrowitz. “I think that SBA has extremely harsh determinations and make it extremely difficult for anyone to receive a loan from them.”
He added: “I know of storekeepers on Emmons Avenue that needed loans and didn’t apply because it was too cumbersome. And those that did jump through hoops to work with them, they are still waiting to hear from SBA.”
In the zip code 11235, SBA has received 2,108 applications and funded 456 home loans, 47 business loans and two economic injury loans, a rate of 24 percent. The loans are worth a total of $27.2 million. In 11229, SBA got 802 loan applications and funded 375 for homes and businesses, a rate of 47 percent. The loans are worth nearly $21 million.
In 11224, which covers Coney Island, SBA had received 1,468 loans applications and funded 393 for homes and businesses, a rate of about 27 percent. The approved loans in Coney Island are worth approximately $18.2 million.
Congressman Hakeem Jeffries, a first-term Democratic congressman whose district includes Coney Island, Brighton Beach and Manhattan Beach, credited SBA for its post-storm efforts, but said the agency needs to do more to help storm victims.
“The Small Business Administration has done the best job that they can under the enormity of the circumstances, but the nature of the disaster will require the agency to do more in the months to come,” Jeffries said.
Rick Miranda, who runs the Brooklyn Hispanic Chamber or Commerce, said SBA had been doing a good job helping businesses in the borough in the aftermath of Sandy. The Hispanic chamber is one of two organizations in Brooklyn that is certified to originate SBA loans and Miranda knows the process well. Even in normal times, without the backlog of applications Sandy generated, it can be tough to gather the paperwork needed for SBA approval. But Miranda said SBA had been responsive to his requests since Sandy, even agreeing to send more Spanish-language agents to Brooklyn to help Hispanic business owners with paperwork.
“With devastation of this magnitude, I don’t think it was negligence on behalf of the agency,” he said. “I think they’re doing the best they can.”
Still, Cymbrowitz criticized the SBA process as unresponsive to the scope of the damage Southern Brooklyn took from Sandy.
“What happens is, in order to get the loan, it had really nothing to do with the loss, but had to do with the credit of the business owner, which was never really explained to the business owner,” he said. “So the business owner, the amount of money he would receive, is really based on his credit history and not the damage he received.”
– Craig Giammona