![handle is hein.tera/crser0070 and id is 1 raw text is: Order Code RS21061
Updated November 29, 2001
Small Business Disaster Assistance:
Responding to the Terrorist Attacks
Bruce K. Mulock
Specialist in Government and Business
Government and Finance Division
Summary
In addition to causing the loss of more than 4,000 human lives, the September 11
terrorist attacks destroyed or shut down an estimated 15,000 businesses-the vast
majority being small businesses-in and around New York City's World Trade Center
complex. Staggering as these business losses were, they account for only a small fraction
of the impact nationwide. Serious economic injury resulting from the attacks quickly
spread to countless firns across the United States.
On the whole, start-ups and other small businesses have been particularly hard-hit
because they are generally less prepared financially and otherwise to deal with crisis. In
contrast, virtually all large firms already had written disaster plans. Certain types of small
businesses have been disproportionately affected. Those especially hard hit: suppliers,
service providers, or finns in complementary industries to those sectors most adversely
affected, notably the financial, hospitality, and travel and tour industries.
The U.S. Small Business Administration (SBA) has long-standing disaster loan
programs as well as other loan and managerial assistance programs that can help
businesses deal with the aftermath of the terrorist attacks. (Details on SBA's response
to the September 11 terrorist attacks can be accessed from the agency's home page at
[http://www.sba.gov/].) Subsequent to the attacks, several emergency relief bills were
introduced to make additional firms eligible for SBA assistance under more favorable
terms. This report discusses the impact of the terrorist attacks on small businesses,
provides an overview of the types of relief assistance currently available from the SBA,
notes the agency's response to date, summarizes proposed legislation, and analyzes
policy options for Congress. It will be updated as events warrant.
Impact of Terrorist Attacks on Small Businesses
The image that typically comes to mind when one thinks about the people who were
working in and around the World Trade Center when the terrorist attacks took place is
that of stockbrokers and others associated with large financial services companies. That
image, however, is misleading. The 375,000 or so people who commute to the area
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