Right now, the scores of businesses at LAX and in the travel and tourism industries that are struggling for survival after the Sept. 11 attacks have little recourse in the way of government help.
The City of Los Angeles has been telling them to call the U.S. Small Business Administration, but the only additional loan programs the SBA has are for those businesses in New York and the area around the Pentagon.
But a bill is working its way through Congress that would set aside money for additional loan guarantees for indirectly impacted businesses, such as travel agencies and airport concessionaires. The bill, S-1499, by Sens. John Kerry, D-Mass., and Christopher Bond, R-Mo., passed the Senate last week and could be taken up by the House as soon as it reconvenes this week.
Businesses that were shut down by government officials out of security concerns airport concessionaires among them would be eligible for no-interest disaster loans. Other businesses would find the eligibility criteria eased for the SBA’s traditional 7(a) low-interest loan guarantee program, the total funding for which would be boosted from the current $15 billion to $17 billion.
Yet even officials at the SBA have their concerns about whether this would be enough.
“These businesses need a combination of working capital to ease their cash flow and a return to normal market conditions,” said Herbert Mitchell, associate SBA administrator for disaster assistance. “If market conditions don’t return to normal, it’s by no means clear that these businesses would have the revenue streams necessary to pay back the loans. In that case, we would try to help these businesses shift their marketing strategy.”
State Tourism Aid?
The state may be facing a multi-billion dollar deficit, but that hasn’t stopped one tourism official from seeking additional state funds to help the region’s devastated tourism industry.
At the initial meeting of Mayor James Hahn’s Economic Impact Task Force on Oct. 12, Mike Collins, senior vice president for the Los Angeles Convention and Visitors Bureau, said the LACVB will ask for $15 million to market the state’s major metropolitan areas to folks in the Western U.S.
“That $15 million would generate an additional $360 million in revenues in these metro areas; that’s a return of more than 20-to-1,” Collins told the task force. State funding is essential, Collins said, because a unified marketing campaign for all of California’s metro areas needs to be put forward.
But would the Gray Davis administration and state lawmakers bite at a time when Davis has ordered nearly every agency to cut 15 percent from its budget for fiscal 2002-03.
Collins admitted that securing the state funding would be a long shot in the current environment. “But we have to try it, so that we can then turn to the private sector and tell them we’ve done all we could on the government level.”
Staff Reporter Howard Fine can be contacted by phone at (323) 549-5225, ext. 227 or by e-mail at [email protected].
