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Small-business loans not reaching gulf area

Before Katrina, most Americans had never heard of New Orleans' Lower Ninth Ward. NBC's Kerry Sanders reports on the trouble getting help to small businesses.

Donald Johnsen is trying to hold it all together.  "I found my truck on top of my car,” he remembers. “My car was in my kitchen."

Hurricane Katrina not only destroyed his house, but wiped out a third of the Louisiana businesses he supplied with coffee.  "I haven't had a salary since Katrina hit, Johnsen says, “and I don't see getting a salary until probably the end of February, if even then."

To keep small businesses like Johnsen’s alive after a disaster, the Small Business Administration provides low-interest loans. But of the more than 326,000 applications in the four months since Katrina, only 37 percent have been processed and only 7 percent — just over 24,000 — of loan applicants have gotten any money at all.

"As much as you hear about billions of dollars being dumped into this area to help people, where is it?” Johnsen asks. “I don't see it. My friends don't see it."

“It's hard to understand,” says Sen. Olympia Snowe, R-Maine, the chairman of the Small Business Committee, “It's unexplainable as to why the Small Business Administration isn't willing to shine in this most crucial moment not only for the gulf, but for America."

SBA spokesman Ed Marshall knows the anxiety. He's waiting himself for a loan to repair his side business.  "I know I keep doing the same thing,” Marshall says. “I keep using the phone, and I keep dialing that phone and keep hitting that zero, because I tell people when somebody says, ‘no,’ I say, ‘next.’”

In a statement to NBC News, SBA Administrator Hector Baretto says officials are "processing loans ... just as fast as they can."

Illinois Republican Rep. Don Manzullo is chairman of the House Small Business Committee.  He defends the SBA, saying, “Sure you could become more efficient,” Manzullo says, “because everybody could become more efficient — but under the circumstance SBA performed I think in an exemplary position."

Still, victims complain the loan process moved faster four years ago, after 9/11, so why not now?  After all, the underpinning of the American economy lies in small businesses.  If they can't make it, then New Orleans won't make it.

"I think the sluggish approach of the SBA is causing small businesses to die,” says Walter Isaacson of the Louisiana Recovery Authority. “But it's also undermining the president’s own pledge to help the region rebuild."

"If my business doesn’t have money,” Johnsen says, “I can't pay myself, and my life can't get back to normal."

So, for now, Johnsen’s “normal” is sleeping in his temporary office.