This article is over 4 years old

Energy & Environment

Texas Small Business Group Wonders About Disaster Loan ‘Gap’

A small number of the businesses flagged as potentially needing the loans wound up receiving them

Houston in August 2017 days after Hurricane Harvey hit.

After Hurricane Harvey, tens of thousands of small businesses were flagged as potentially needing federal disaster loans. But less than 4,000 received them.

So what happened? That was the question asked at a Texas House hearing on Tuesday.

According to the U.S. Small Business Administration (SBA), the Federal Emergency Management Agency (FEMA) referred more than 102,000 businesses to the SBA for the loans, but only about 12,500 businesses actually applied. Of those, the SBA approved about 3,700.

At Tuesday’s hearing, Albert Salgado with the Texas Small Business Development Center Network told lawmakers his group wonders about the gap.

“What happened to those people? Could be many, many reasons,” he said. “The bureaucracy, they were bounced around, they didn't fill out the application appropriately, they were not able to reconstruct their financials.”

The SBA said businesses that didn’t apply could have had better luck with insurance payouts, gotten approved for other loans, or simply didn’t qualify.

Still, Salgado said that going forward, small businesses need more education about the loan process.