SBA Says Katrina Helped Agency in Overhaul
After applying for an SBA disaster loan in October 2005, a New Orleans seafood processor damaged by Hurricane Katrina didn't get approved until May 2006 and didn't receive the funds until October 2006.
The SBA used Tommy's Seafood as an example to show how the agency was not prepared to handle the deluge of relief requests after Katrina. The business suffered major damage to its two facilities, including equipment and inventory loss, after the catastrophic storm in August 2005 caused destruction on the Gulf Coast, the SBA said. It took a year for Tommy and Maria DeLaune, the business' owners, to receive the disaster loan funds.
"SBA was not prepared, nor fully equipped to effectively provide assistance in the wake of [the Katrina] disaster," the agency said. "But we've learned from our mistakes and, today, we have a much better disaster assistance program in place with increased staff, improved technology and training, and a streamlined loan process."
The seafood processor and wholesaler suffered another setback when the BP oil spill closed fishing waters where its suppliers worked. The DeLaunes had to seek seafood 500 miles away, resulting in higher expenses and lower profit margins, the SBA said.
Unlike their disaster loan application process after Katrina, the couple said their SBA experience this time around was "amazing," according to the agency. Their loan was approved in 16 days and fully disbursed just a month later. The SBA said it also deferred their existing Katrina loan for 12 months so they can use more of their resources to deal with the financial strain caused by the oil spill.
The SBA said its reaction to the oil spill is a result of its efforts to speed up its disaster loan processing system. The agency said it reduced its average processing time from more than 70 days to 10. Applicants can now apply online. Loan processing center workstations have increased from 366 to 1,750 and SBA disaster staff grew from 800 to 1,200. The SBA said it also has more than 1,500 active reserves and 500 ready reserves on call.