updated 10/25/2005 9:39:14 AM ET 2005-10-25T13:39:14

One month after Hurricane Rita tore into southwestern Louisiana, small businesses are finding themselves in a familiar position: waiting for aid from the federal government.

The Small Business Administration, which didn't cut its first check to Hurricane Katrina until more than a month after the monster storm made landfall, hasn't distributed any money for economic victims of Rita, according to documents obtained by The Associated Press.

The agency's figures show that it has received more than 9,500 applications for home and business loans in Texas and Louisiana. Six loans have been approved. On a day when another hurricane tore across the southeastern United States, one key federal lawmaker said the government's response has been "simply unacceptable.

"It has been a month with no approvals or loans made for those firms impacted by Hurricane Rita _ now what will it be for the small businesses that were hit by Wilma?" said Rep. Nydia Velazquez, a New York City congresswoman who's the top Democrat on the House panel overseeing the agency.

SBA officials, however, say Rita has posed almost as many logistical problems for them as Katrina, which barreled ashore near New Orleans on Aug. 29 as a Category 4 storm. Rita, which battered the Texas-Louisiana border as a Category 3 hurricane as it came ashore on Sept. 24, was the strongest storm ever to pass through the Gulf of Mexico. Estimates put the total insured losses between $2.5 billion and $7 billion.

The agency had promised a swift response, but the hurricane flooded roads, downed power lines for more than 1 million customers and destroyed buildings, making it difficult for federal officials to assess damage and begin the process of making loans, an SBA official said.

"A lot depends on the situation on the ground," said Michael Stamler, an SBA spokesman.

SBA officials came under fire at a congressional hearing earlier this month, with lawmakers calling for an investigation into the SBA's slow response in making loans after Katrina and high rejection rates for applicants. Within a month of the hurricane's landfall, more than 95 percent of all applicants had been turned down.

The high rejection rate is being described by officials as the result of a new computer system that takes all applications into account, not just loans that are seriously considered for approval by the agency. SBA officials, however, conceded that the rejection rate for Rita-related loans is quite likely to top 70 percent _ much higher than the traditional 50 percent to 55 percent for most disaster recovery efforts.

"We're dealing with areas where there's a lot of low-income people," said Herb Mitchell, head of the SBA's disaster assistance office.

Mitchell also said early figures tend to exaggerate the rejection rate. Typically, he said, people have to be rejected for government loans before they can apply for grants, which don't have to be paid back.

Last week, SBA officials announced they would relax some filing requirements to expedite loans by not requiring a three-year monthly sales analysis, three years of tax returns, and title or record searches for loans under $50,000. The agency also has given a one-year deferral of principal payments to existing borrowers in the disaster area.

The agency also said it's more than doubled the size of its staff since the hurricane season began, virtually quadrupling the size of its disaster assistance office by adding temporary employees to help process loans.

Velazquez, however, said the SBA needs to begin lending money to small businesses.

"This administration has got to start doing more than making promises to help these businesses get back on their feet," she said. "They need to start providing relief."

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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