Sandy loan approval process inefficient, Fed watchdog group says

Superstorm Sandy victims in the city who own small businesses experienced major delays and problems from assistance programs because the federal government was unprepared for the huge number of applications, according to a report released Thursday by a congressional watchdog group.

The Government Accountability Office said the federal Small Business Administration failed to meet any of its goals for processing emergency loan applications following the Oct 29, 2012 storm.

The average time the agency took to process a physical disaster loan was 45 days and it took even longer for victims to see any money, according to U.S. Rep. Nydia M. Velázquez, who requested the study.

“Missteps, a lack of planning, and an inability to right the ship quickly left businesses frustrated and unable to secure the financing they needed,” she said in a statement.

The GAO said the SBA received 5,453 loan applications from Sandy victims in the five boroughs and approved about 24% of those requests. Other issues, such as “technological challenges,” slowed down the process, according to the report.

What’s worse, according to the watchdog groip, is that SBA hasn’t revised any of its disaster preparedness documents in light of what happened following Sandy. SBA acknowledged the report and said it implemented changes to improve its disaster assistance including a rapid approval process and increasing the limits on unsecured loan limits.

Velázquez recommended that Congress reopen the SBA’s Disaster Program for Sandy victims, like it did for Katrina victims who had problems getting help from the agency.

“Given GAO findings, New York’s small businesses deserve another opportunity to secure assistance from SBA,” she said.