240-2001 LTC
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CITY OF MIAMI BEACH
Office of the City Manager
Letter to Commission No.o1LfO - ~oOI
m
From:
The Honorable Neisen O. Kasdin and Date: October 25, 2001
Members of the City Commission
Jorge M. Gonzalez \ ~
City Manager 0
Small Business Administration Economic Injury Disaster Loans
To:
SUbject:
On October 10, 2001, the Administration testified to the Dade Delegation about the economic
impact of the events of September 11. At that time, one of the emergency legislative priorities that
the Administration had identified was to increase the availability of relief money and services from
agencies such as the Small Business Administration (SBA).
On October 17, 2001, the Mayor and City Commission approved the City's emergency legislative
package, which included the above-mentioned item.
Previously, only businesses located in the communities declared disaster areas by the President
(New York City and adjacent counties in New Jersey, Connecticut, Pennsylvania and
Massachusetts; Arlington County in Virginia and adjacent counties in Virginia, Maryland and the
District of Columbia) are eligible to apply for disaster loan assistance from the SBA.
Prompted by the widespread economic impact of the terrorist attacks on New York City and the
Pentagon, the U.S. Small Business Administration has widened access to EIDLs to small
businesses across the country. This action represents a major, unprecedented change in the
disaster loan program.
On October 22, 2001, the SBA published new regulations expanding the authority of Economic
Injury Disaster Loan (EIDL) assistance across the country to eligible small businesses that have
suffered substantial economic injury as a direct result of these attacks or a Federal action taken
directly after the attacks. The EIDLs provide eligible small businesses with the working capital
needed to pay ordinary and necessary operating expenses that they would have been able to pay
had the disaster not occurred.
Specifics about the EIDL Program from the Small Business Administration are:
. Interest rate: the maximum interest rate for the program is 4%.
. The loan term is up to 30 years.
. The loan amount limit is $1.5 million. The actual amount of each loan is limited to the
economic injury as calculated by the SBA.
. Credit requirements: the SBA must have reasonable assurance that loans can and will
be repaid.
. Collateral requirements: Loans less than $5,000 do not require collateral. Loans greater
than $5,000 require collateral, which will consist of a first or second mortgage on the
business property, in addition to personal guaranties by the principals of the business.
. Borrowers must obtain and maintain appropriate insurance.
Business interested in applying can also contact one of the four SBA disaster area offices to obtain
an application. The office that oversees Florida is in Atlanta, and can be reached at 1-800-359-
2227. The application deadline is January 21, 2002.
The City of Miami Beach Economic Development Department has established a relationship with
the local office of the Small Business Administration and is available to assist eligible businesses
in accessing Economic Injury Disaster Loans. More information and the full press release are
available in English and Spanish at www.sba.gov/news/indexheadline.html.
JMG\CAAt\~
c: Christina M. Cuervo, Assistant City Manager
Kevin Crowder, Economic Development Division Director
Elyse Sitomer, Business Liaison
Civicall
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