By John Kerry

When Jimmie Rucker left his job as an engineer to start his own Massachusetts barbecue joint about 18 months ago, he thought the test of his business plan might be the heat of his spicy sauce -- not his high heating costs. But this winter, Rucker's natural-gas bills for Boneyard Barbeque have soared 50%. If this keeps up, Rucker may not be able to afford the gas to fuel his grills and smokers -- and if that happens, his business could disappear quicker than a plate of juicy ribs.

Jimmie Rucker's is not the only business in this predicament. Since the weather turned cold, the phones of the Senate's Small Business Committee have been swamped by calls from the owners of thousands of small businesses -- restaurants, greenhouses, medical labs, apartment buildings -- in dire financial situations because of huge heating bills over which they have little or no control.

Just as we depend on small businesses to fuel our economy, they depend on affordable energy to fuel their businesses and protect their bottom lines. Heating-oil price spikes are particularly devastating to small businesses because they rarely have the credit lines or cash flow to compensate for the increased operating costs caused by dramatic price increases. When operating costs rise gradually, small businesses have time to adjust their pricing and operations accordingly. But rapid shifts in operating costs such as the ones we've had this winter and last can cause cash-flow difficulties, especially when compounded by cold snaps.

Price spikes

Problems in the Northeast, where last year the cost of home-heating oil jumped as much as 80% to 100%, have been especially pronounced. During one cold snap in Massachusetts, prices jumped so high without any warning that we declared a state of emergency.

While we search for long-term solutions, small businesses suffering from economic injury need access to capital to mitigate or avoid serious losses. But commercial lenders typically won't make loans to small businesses in dire need because they rarely can prove they will have the increased cash flow necessary to repay the loan. It takes an added incentive -- such as a federal loan guarantee -- for private banks to give these loan applications a second glance.

That's what we did last year to help small businesses deal with the heating-oil crisis: government-guaranteed private-loan programs. This stopgap answer helped many companies make it through a hard winter. But with credit tightening, that's no longer enough. We need to make capital directly accessible to every needy small business this winter -- and we need to do it rapidly.

Fueling the economy

The answer is to expand the Small Business Administration's economic-injury disaster loans to include small businesses adversely affected by increases in the prices of heating oil, propane, kerosene and natural gas. Economic-injury disaster loans give financially strapped small businesses sufficient working capital until normal operations resume, or until they can restructure or change the business to address market fluctuations. These are direct loans at subsidized interest rates of 4% or less -- precisely the helping hand companies need to ride out tough economic times.

Small-business disaster loans are pro-business public policy -- and pro-consumer policy, too. We should use them to help hard-working American small businesses -- the engines of our economy -- before they run out of fuel.

Sen. John Kerry, D-Mass., a member of the Senate Small Business Committee, has proposed legislation to expand the Small Business Administration's disaster loan program to include small businesses adversely affected by heating costs.


Firms' energy costs heat up

Both the amount of commercial natural-gas consumption and the price of that natural gas are increasing:

Total commercial spending on natural gas (in billions) 1999$16.3 2000 (1)$21.3 2001 (2)$27.7

1 - Estimate

2 - Projected