Small Business Disaster Assistance: Responding to the Terrorist Attacks

Publication Date: November 2001

Publisher: Library of Congress. Congressional Research Service

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Research Area: Business

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Abstract:

In addition to causing the loss of more than 4,000 human lives, the September 11th 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 firms 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 firms 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.