An update on the Small Business Administration’s role in the Maui fires recovery effort

We all saw the devastation from the wildfires in Maui toward the end of the summer. Obviously several federal agencies sprung into action for rescue and recovery efforts. One particular agency many may not know plays a big role in helping people get their lives back together. The Small Business Administration is currently in the process of giving out millions in Disaster Assistance loans for those impacted by the Maui wildfires. For an update, Federal Drive Executive Producer Eric White talked to Francisco Sánchez Jr., the Associate Administrator in SBA’s Office of Disaster Recovery & Resilience.

Interview Transcript: 

Francisco Sanchez Jr. Administrator Guzman had the opportunity to join the FEMA administrator just a couple of days after the disaster declaration. And what we saw on the ground was that this was going to be a whole of community effort and a whole of federal family approach to get on the road to recovery. The damage was certainly catastrophic. It’s still early in terms of what the residents of Maui need to be doing to recover. So we’ve been on the ground since and our commitments to be there as long as it takes.

Eric White And as far as commitment goes. When it comes to a financial standpoint, what has SBA assistance gotten up to? You know, the most recent figure I see was around 40 million or we still around there, or is it probably going to go up?

Francisco Sanchez Jr. As of this morning, the SBA has approved more than $106 million to disaster survivors on the ground in Maui. We continue to take applications, continue to do outreach to make sure that people are aware that we are there as a resource. And SBA is uniquely positioned as the only federal agency that to this scale and scope, can help renters, businesses, homeowners and private nonprofits all across Hawaii. We’re helping to bring the disaster relief not only to long term lending, but for the first time ever and aggressively bringing a whole of SBA approach to make sure that beyond lending, other resources of this agency are being made available to the disaster survivors in Maui.

Eric White I’ve never been there, but just looking at the footage that I saw and reading about it, it didn’t seem like it was a very conglomerated area. It seemed like a lot of people were making a living, you know, whether it was being a diving instructor or, like you said, just renting out a house because it’s in such a beautiful area. Is that what you gathered in your investigations?

Francisco Sanchez Jr. It is. It was also my first time ever to be on Maui. And so it was a great learning opportunity in terms of the culture and looking beyond the extensive data that we have done to make sure that we can refine our programs to meet disaster survivors. Being on the ground gives you such an incredible context. The vast majority of folks on the island are somehow tied to tourism for the economy. So having met with local officials, disaster survivors, the administrator herself went to a shelter to connect with disaster survivors directly. And what we heard loud and clear was tourism is such a critical part of the economy that we need to deliver on that. It’s not just important for those businesses, but, you know, as you know, 50% of employees across this country are tied back to a small business. And so, for example, one of the things Administrator Guzman did was a very first ever approach. We quickly changed our rulemaking to ensure that all of Hawaii could apply for economic injury, disaster lending. That is, if you are a business, for example, that you did not suffer physical damage, but you’re seeing a downturn in your business because of the tourism, is that they could apply for economic injury. And that’s critically important because those employees are of Hawaii from Maui and we want to make sure that they get disaster relief if they were impacted personally. But we also don’t want to see added consequences for that community if they start losing their jobs and those kinds of things that would happen and businesses didn’t have the resources they needed to stay open.

Eric White I was wondering if you could expand on that data gathering point that you mentioned other than folks, you know, coming to you with applications and telling you exactly what happened to them, what other mechanisms are at SBA’s disposal for finding folks who may not even know that they qualify for SBA assistance?

Francisco Sanchez Jr. One, doing a lot of education is in terms of data. We have a very good sense of where the damage happened, where the damage was physically, not only in Lahaina, which obviously the most devastated that historic part of the island, but also other parts of the community that may have seen physical damage. And so they’re working very closely to see what is the best way to approach disaster survivors, where they might be housed, being able to go working with the American Red Cross and local officials to be able to provide that information, be respectful of people’s locations right now as they may be in non-congregate shelters, they may be elsewhere, but making sure that they get that information also through our data analysis, looking at the businesses on Maui and other parts of the island that may have been impacted. So we are targeting to make sure that those folks that unfortunately may have lost family members but also lost their property, that we do targeted outreach to them. And then for businesses that we do that in a culturally appropriate way as well to make sure that they know that even if they didn’t have physical damage, they can come to SBA for that. And one thing that the administrator did just a week and a half ago was to host a listening session with community leaders, business leaders, civic leaders in Maui to hear directly from them what they saw as the challenges were and not simply go in and say, here’s what we can deliver, but saying, what do you need? And then coming back and looking at our programs very extensively and to see how we can bring a whole of government approach to make sure that we’re delivering on the president’s promise to the people of Maui. And the administrator Guzman’s direction to bring the whole of SBA to the ground to help people recover.

Eric White What can you tell me about a business recovery center? Who’s involved in it, and what does it include?

Francisco Sanchez Jr. A business recovery center is basically a one stop shop where people can come and connect with the Small Business Administration to see what we have available. You know, one of the things that people know us most for is a low interest long term disaster lending to give businesses, homeowners, renters and private nonprofits the capital they need to be able to, one, repair the damage and rebuild, but also mitigate and be able to recover economically. But when they come to a center, we will help them with their application. We will do some education about the program. And now, thanks to the whole of SBA approach that the administrator has directed us to do, connecting them with other programs. So if you came in for a loan and you got it, we’ll certainly expedite that for you. But we’ll also connect you with other SBA resources. So we’re not just doing lending. How do we get your business in the queue for government contracting? How do we connect you with mentors and other resource partners to help make sure that not only you rebuild in a mitigated way, but what can we do to make sure that your business is more resilient by its processes and how it continues to do business in the future. And that said, if you come and decide you don’t want a loan in your business, we’re still going to connect you with those other SBA resources to make sure that we can help disaster survivors in the way that they need those resources.

Eric White This one is kind of a curiosity question. You know, it’s been a harrowing past five years for small businesses and then, you know, something disastrous like this happens. Have there been any lessons learned that SBA has garnered from small business assistance loans that they’ve given in the past two or three years that are going to be applied to this effort and future efforts?

Francisco Sanchez Jr. SBA learned a lot from the COVID response and the work that SBA has been doing on the ground for years now when it comes to disasters, and some of those are already in play. Administrator Guzman issued a historic change to our policy as a result of COVID, for example. We learned that people needed a little bit more breathing room. They were already paying off some of their loans, their resources, rebounding from the global economy. So now with this came a permanent just a couple of days before the wildfire on Maui. Now, if you get an SBA loan, your first payment is deferred for 12 months and zero interest. So if you’re a business owner, that gives you a lot of room to get the capital that you need today to start your recovery process. But you don’t have to worry about that first payment and you don’t accrue interest for an entire year to help you with those capital access issue. Then the same goes for homeowners as well. This is especially important in Maui, where the recovery is going to be a long time. You saw that community that was so severely impacted and those buildings no longer they are they’re going to need some time. And so that low interest long term loan, that deferment for 12 months with zero interest is critical. We’ve also learned the chronic stressors that businesses are facing across this country, sometimes disaster after disaster after disaster. And it can be challenging out there when capital is a big issue. One of the things we’re also doing is a reconsideration program to make sure that we are taking a real honest look for someone that may have been declined. We did this, started this in Florida. We are amping this up in Maui. So if you come to us and you’re declined for an SBA loan for your business, we will connect with you and tell you why. And with partners on the ground, we will have those resource partners walk you through the process and try to get you to a yes. And some of those are just some of the things that happened during disaster. Buildings have burned down. You may have had your paperwork, you may have had your records. And so what we’re doing now, rather than declining you just because of that, we’re going to connect you with your resource partner. It could be a local partner, a state partner, our federal partners across the federal family helping you find that paperwork, helping you get that in so we can have a successful application for you.

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