Agency urges lenders to give flood victims a break
I was amazed at the types of responses I got to my recent blog post on giving grants to flood victims.
Many readers were up in arms that the women quoted in the post suggested the government should give small business owners hurt by the floods a grant instead of a loan because so many of these entrepreneurs were already in debt.
One reader summed up how many of you were feeling:
"The flood is indeed a tragedy, and I will gladly donate money to help flood victims. However, why does being a flood victim entitle anyone (to) a grant from the government? The government is not the cause of the flood. Furthermore, these business leaders freely chose to establish their businesses in a flood zone. Instead of seeking handouts from the government, these business leaders should take care of themselves with more prudent business practices such as maintaining a realistic emergency (flood) fund, etc."
There are some valid points here but when our neighbors hit rock bottom, shouldn't we all come together?
Even the federal agency behind many of the loans is extending a tiny lifeline to these small business owners now.
Late last week, the Small Business Administration put out a release urging lenders participating in the its loan program to give a break to small firms in the Midwest flood zone.
The SBA urged "lenders to provide deferment relief of three or more months for borrowers in the six Midwest states that were declared federal disaster areas following the recent flooding.
"Counties in Iowa, Indiana, Illinois, Nebraska, Missouri and Wisconsin, and adjacent counties in Kentucky and Ohio were recently declared federal disaster areas, making federal recovery assistance available to residents and businesses in the area."
I know, it's not a government grant. But I can imagine such a deferment will go a long way for small business owners trying to come to grips with the devastation.
The SBA move is only a suggestion, not a guarantee that these lenders will allow such deferments.
"I want you to understand that we do not have the authority to compel lenders to offer these deferments to their borrowers," explains SBA spokesman Mike Stamler. "We can only urge them to do that."
We can all do a little urging of our own. If you're dead set against grants for flood victims, giving them a few extra months before they have to start repaying loans isn't asking a lot, is it?
One reader from Cedar Rapids, Iowa, put it best: "I, for one, like most (of) the people around here that will help regardless of who it is or what state they are in, am going to do all I can to help, regardless of who 'the public' feels is deserving. We are all in this together, whether you want to believe it or not."
