Hurricane Katrina victims have swamped the Small Business Administration with loan requests, and employees in Denver and elsewhere have been called on to help process them.
About 250 people in 68 offices throughout the country are working on the loans as part of the largest disaster-loan effort in the agency’s history.
“It is unusual for the districts to be called in, but we have never had anything of this magnitude,” said Mick Ringsak, SBA regional administrator in Denver.
The employees in the regional and district offices constitute only a fraction of those working on the loans. The SBA’s Office of Disaster Assistance has grown from 880 staffers before Katrina struck to more than 4,170 as people were hired to provide temporary lending help.
“Every single time we have a disaster, we add people if we need to. Never before have we gotten this many people onto the disaster operation,” said Anne Marie Frawley, SBA spokeswoman in Washington.
The SBA also has been providing loan assistance to victims of Hurricanes Wilma and Rita, which hit the Gulf Coast within weeks of Katrina.
Since Katrina struck Aug. 29, the agency has processed more than 250,000 loan applications and approved $5.47 billion in disaster loans to more than 77,000 homeowners, renters and businesses.
Critics in Louisiana and elsewhere have called the SBA’s response inadequate. “The response rate has been slow and the number of (loan) rejections has been high,” Lana Sonnier, press secretary for Louisiana Economic Development, said Friday.
In Congress, the agency has also been accused of a slow response and of delaying requests for needed funds.
Senate Small Business Committee chairwoman Olympia Snowe, R-Maine, reportedly said the agency’s disaster loan program was “aptly named.”
The Government Accountability Office is investigating the agency’s response.
Critics are ignoring the facts, Frawley said.
The speed with which the agency has responded has increased as personnel were added and trained, she said.
Loans are turned down when applicants can’t afford to pay them back and the SBA regularly provides information to Congress on its finances, she added.
“We are in constant communication with the Hill. They are fully aware of where we are so there shouldn’t be any question.”
Most employees in the regional and district offices work with Chamber of Commerce officials and do other tasks unrelated to loan applications, said Christopher J. Chavez, SBA spokesman in the Denver regional office.
All of the employees have previous lending experience, Chavez said.
Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com.
