By Albert B. Crenshaw

Accidents of geography continue to produce oddities and ironies in the wake of the Sept. 11 terrorist attack. The latest: Small businesses in Montgomery County are eligible for special Small Business Administration economic injury disaster loans because of the attack on the Pentagon, but those in Prince George's are not.

The reason, according to the SBA, is their locations.

Arlington County has been proclaimed the "primary disaster area" in the Pentagon attack, so businesses of all sizes and nonprofits there can borrow up to $ 1.5 million to repair or replace damaged real estate, machinery and inventory.

The agency also offers "economic injury disaster loans" of up to $ 1.5 million available to eligible small businesses unable to pay bills or meet operating expenses. The interest rate for these loans is 4 percent, significantly below market rates, the SBA said.

These loans also are available in jurisdictions contiguous to the primary disaster area as well as the area itself. That means that, in addition to Arlington, businesses in Alexandria, Falls Church and Fairfax County are eligible, as are those in the District.

And so, it turns out, are those in Montgomery County.

A careful look at the map reveals that Montgomery County and Arlington do touch. The contact is at a point on the south shore of the Potomac. The circumstance occurs because the western boundaries of the District and Arlington follow the same line, since Arlington was once part of the District.

Prince George's loses out because Alexandria, and also the southern tail of the District, stands between it and Arlington.

An SBA spokesman said the agency does not have discretion to include non-contiguous jurisdictions, close though they may be, and must go "strictly by the book."

More information on SBA assistance is available by telephone at the agency's toll-free number, 800-659-2955, or on the Internet at

Congressional leaders are rushing to boost the level of assistance available to small businesses that were affected directly or indirectly by the attacks.

Sen. John F. Kerry (D-Mass.), chairman of the Committee on Small Business and Entrepreneurship, last week introduced emergency legislation to provide financial and other relief. Under the measure, small businesses would be eligible for special-rate loans if they were directly affected because they are physically located in or near the buildings or areas attacked or closed for security measures; if they were not physically damaged or destroyed or in the vicinity of such businesses, but directly or indirectly affected by the attacks; or if they are in need of capital and investment financing, procurement assistance or management counseling.

Sen. Christopher S. Bond (R-Mo.), ranking minority member of the panel, is a cosponsor of that bill and has offered one of his own that includes tax relief and would boost government contracting with small business.

On the House side, Rep. Nydia M. Velazquez (D-N.Y.) has introduced a measure that includes low- and no-interest loans and a variety of regulatory changes that would enable the SBA to assist injured small businesses more extensively.

The fate of all these measures is uncertain.

In addition to businesses damaged by the attack, others are in jeopardy because owners or key employees are reservists who have been called to active duty in the military.

Kerry noted recently that under the Veterans Entrepreneurship and Small Business Development Act, enacted in 1999, reservists have access to low-interest disaster loans designed to keep businesses afloat and may be able to defer SBA loan payments. Also, the reservist, or the person left in charge of the business, can receive counseling and training through the SBA.

Kerry urged small-business owners who qualify for relief assistance to call their local SBA field office or consult the agency's Web site,

In a ruling stemming from an older military protection law, a federal court in Shreveport, La., held recently that a bank should have given an Army reservist a lower interest rate while he served in Bosnia in 1996, even though his loans went to his corporation and not to him personally.

The court held that the reservist, Lt. Col. Stewart Cathey, and his wife were entitled to the lower rates because the bank required them to co-sign the loans personally.

The Soldiers and Sailors Relief Act requires banks to cut interest rates to 6 percent on existing loans to servicemen on active duty. It also protects deployed troops from foreclosures and other civil court actions.

Cathey's company borrowed $ 850,000 from First Republic Bank in Shreveport for convenience stores in northeastern Louisiana just before he was called to active duty.

First Republic refused to lower Cathey's rate because the loans were made to his business, its attorney said. "A corporation is not a soldier," the lawyer said.

When Cathey returned from Bosnia nine months later, one store was closed and the second was failing, said Cathey's lawyer, John Odom. The bank foreclosed, then bought the stores back at a sheriff's sale.

The district court ruling, issued Aug. 13, applies only to parts of Louisiana, but Odom said the case was the first in the country to let reservists and Guardsmen sue in federal court under the relief act.

Not to be left out, the Internal Revenue Service reminded corporate taxpayers that they may claim quick refunds of estimated tax overpayments before they even file their tax returns. This could help fiscal-year filers whose expected profits were reduced or eliminated by attacks or by other conditions, the IRS said.

A business may use Form 4466 to apply for a quick refund after its tax year ends if its overpayment is at least 10 percent of its expected tax liability and is $ 500 or more.

The form must be filed by the 15th day of the third month after the end of its tax year, and before filing the tax return for the year. For example, a corporation with a tax year ending Sept. 30 could apply for a quick refund from Oct. 1 through Dec. 15.

Form 4466, "Corporation Application for Quick Refund of Overpayment of Estimated Tax," is available on the IRS Web site ( or by calling 800-829-3676.

The attacks deflated small-business optimism with startling speed.

A special edition of the NFIB Foundation's economic trends survey showed optimism falling to its lowest point since 1993.

In August, owners appeared to be feeling better about the future after a spring and summer of uncertainty -- and then the terrorists hit.

"Small-business owners seem to have taken the attack personally, with far fewer seeing hope for sales gains," NFIB chief economist Bill Dunkelberg said.

Because of the poor prospects, small business are curtailing hiring plans as well as capital spending programs, the survey found.

President Bush nominated Thomas M. Sullivan, executive director of the NFIB Legal Foundation, to be chief counsel for the SBA's Office of Advocacy.