By Marcia Heroux Pounds and Deanna Zammit

Florida restaurants, souvenir shops and other small businesses could qualify for low-interest federal loans -- if they can prove their sales were hurt after the Sept. 11 terrorist attacks.

"A down economy doesn't count," said Don Waite, spokesman for the Small Business Administration's disaster relief office in Atlanta.

The SBA is extending its disaster relief program nationwide to small businesses whose sales have been hurt by the terrorist attacks in New York and Washington, D.C.

Carol Chastang, spokeswoman for the disaster relief office in Washington, said the phone hasn't stopped ringing for six weeks. "We've been receiving calls from business owners from across the country. It seemed really obvious there was a real need."

Until now, the loans only were available in and near New York City and near the Pentagon, where terrorists attacked. The SBA has made $54 million in loans in the New York area and $2.3 million in Virginia.

Small businesses may apply for a loan of up to $1.5 million. The loans can be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The initial interest rate on the loans is 4 percent with a maximum term of 30 years.

Of the about 200 calls the disaster relief office received by midday Monday, "most of them were coming from Florida," Waite said.

Susan and Terry Foley, who own Innovative Leisure Inc. of Lake Worth, said their sales are down 30 to 40 percent from this time last year. After Sept. 11, a dozen of their corporate events, such as company picnics, were canceled, Susan Foley said.

To maintain business operations, "we would need some options," she said.

Harold Berns, owner of Air and Sea Travel Agency in Fort Lauderdale, said a federally backed loan would help him keep his eight-person staff until business resumes. "But it's got to be palatable, because we can't repay what we're not making."

SBA loan officers and supervisors will make decisions about whether a small business qualifies for the loans, which are funded by Congress, Waite said. Collateral, such as real estate or machinery, is required for loans of more $5,000.

Florida businesses can apply for the loans by calling the SBA's disaster relief office in Atlanta at 800-359-2227. The deadline for applying is Jan. 21, 2001.

The SBA said businesses with as many as 1,000 employees could qualify for a "small business" relief loan. There are different standards for each industry. (See the agency's Web site at for more information.)

While the SBA is moving ahead to extend disaster relief loans to small businesses nationwide, a Senate bill that would expand the loan program seems stalled.

Political wrangling between the Senate Small Business Committee and the Bush administration has kept the Kerry-Bond bill in legislative limbo since last week, according to committee aides.

A Senate aide said the Bush administration told the committee the entire nation would be declared an economic disaster area and that would make the bill unnecessary. Since then, Sens. Trent Lott, R-Miss., and Jon Kyl, R-Ariz., have put holds on the bill, she said. The senators were unavailable for comment.

The bill, which had been expected to pass last week, would enable small businesses to apply for up to $5 million in federally backed loans. The bill was written by Sen. John Kerry, D-Mass, and co-sponsored by 44 senators from both parties, including Sen. Bill Nelson, D-Fla.

If the measure passes the House and is signed by the president, nearly $2 billion more would be available for businesses that can prove they were hurt following the attacks on New York and Washington.

Instead of providing direct loans to small businesses, Kerry's bill would allow businesses to borrow from private banks with the federal government as a co-signer. Borrowers would pay a reduced interest rate and could defer principal payments for up to one year. Marcia Heroux Pounds can be reached at or 561-243-6650. Deanna Zammit is a reporter with Medill News Service in Washington.

SMALL BUSINESS RELIEF What: Up to $1.5 million in individual loans to small businesses that qualify nationwide.

Qualifications: Demonstrate "substantial economic injury," usually through lost sales, resulting from the Sept. 11 terrorist attacks.

Interest rate: Initially, 4 percent with a maximum term of 30 years.

Collateral: Real estate, owner's residence, or machinery and equipment can be put up as collateral for loans over $5,000.

Processing: About 21 days, depending on application volume.

Deadline: Apply by Jan. 21, 2002.

Information: 800-359-2227, 7 a.m. to 5 p.m. Monday through Friday.