Local small businesses have until Jan. 21 to make a case that they need financial help to withstand the economic fallout from the Sept. 11 terrorist attacks.
As of Monday, the U.S. Small Business Administration extended its Economic Injury Disaster Loan program, initially open just to small firms directly affected by the disasters, to cover the rest of the country.
Dozens of local flight schools, hotels, restaurants and other businesses may now be able to apply for financing that can be used to pay fixed debts, payroll, accounts payable and other bills that could have been paid had the disaster not occurred.
Since last month’s attacks, more than 460 disaster loans for $49.9 million in the areas surrounding the World Trade Center and the Pentagon have been approved.
As much as $l.5 million can be borrowed per firm at 4 percent for a maximum of 30 years.
But the local SBA office has a tough set of criteria on which applications will be judged, according to spokeswoman Carol Wilkerson.
The expanded program will now be open to firms located in an airport or other facility that was closed or had its operations suspended as a result of the national security risks.
Suppliers to these firms and companies that provided services to a business that was located in or near the World Trade Center or Pentagon also stand a good chance of getting fresh funds.
Others will likely struggle.
A general decline in sales since Sept. 11 because of the public reaction “is not eligible for this program unless it is the direct result of the destruction,” according to the SBA.
And even if a firm does successfully apply, owners should not expect to get a loan over $5,000 without being asked to pledge collateral.
Retirement benefits: Only 17 percent of small firms with fewer than 25 employees offer their staffs retirement benefits, according to a recent study.
Not surprisingly, the firms more likely to provide retirement benefits included larger companies–with six to 25 employees–that have sales of more than $10,000 a month, primarily in business services, manufacturing or the service sector, according to the 20th annual small-business survey by Dun & Bradstreet.
Firms unlikely to offer retirement benefits, according to the 540 executives interviewed, included women-owned businesses, smaller firms with fewer than five employees, home-based operations and companies with annual sales of less than $50,000 a year.
High administration fees and the low margins on which small firms operate are the main reasons they fail to offer retirement benefits, said Mary Lynn Fayoumi, president and chief executive of The Management Association of Illinois.
The employers group’s latest benefits survey shows the picture improves as the size of a firm increases.
In Illinois only about 15 percent of firms with fewer than 100 employees fail to offer some kind of retirement option. That falls to close to 6 percent for companies with more than 500 staff members.
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Family-owned businesses, those that employ women and teenagers, and franchise and fast food outlets often find it difficult to pay such benefits, she said, partly because of the transient nature of their businesses.
And for those that do offer retirement perks, 401(k) plans are preferred by 70 percent of the companies.