New York Times article by Elizabeth Olson

WASHINGTON — Steven C. Preston’s signature accomplishment as head of the Small Business Administration was overhauling the agency’s disaster loan assistance program, a program that was foundering under the crush of Hurricane Katrina claims when he took over nearly two years ago.

Mr. Preston has now moved on. He started this week as secretary of Housing and Urban Development. While he streamlined the way the S.B.A. worked, he left behind various problems that critics and small-business groups say are particularly troublesome in a weakened economy. They cite the need for greater availability of loans in particular.

And because his departure comes in the waning months of the Bush administration, it is unlikely that a permanent leader for the S.B.A., with a mandate to make major changes, will arrive before next year.


Even with Mr. Preston’s efforts to speed up disaster assistance, Congress recently pushed ahead with provisions, part of the farm bill, that amounted to its own overhaul of the S.B.A. disaster loan program.

The legislation’s provisions, said Senator John F. Kerry, Democrat of Massachusetts and chairman of the Senate Committee on Small Business and Entrepreneurship, would “cut through red tape, increase resources, bring private lenders into the response and help bridge that gap while disaster victims begin the process of building their lives.”

And last week, the Senate voted to add $101 million to the agency’s budget. The move was also supported by Senator Kerry’s Republican counterpart on the committee, Olympia J. Snowe of Maine. Both senators argue that the agency needs to step up its efforts since less capital is available elsewhere in the current sluggish economy.

“There is a contraction in the lending program, which I think is antithetical to what the S.B.A. is supposed to be doing,” Mr. Kerry said. “This is a moment where the credit crunch requires the S.B.A. to fill the gap.”

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