Rep. Nydia Velázquez (R-NY), ranking member of the House Small Business Committee, introduced the Small Business Access to Capital After a Natural Disaster Act. It passed in the House last month with bipartisan support.
Velazquez described the bill as a “simple and straightforward” bill to “consider the unique challenges that small businesses affected by hurricanes or other natural disasters have met with securing access to credit.”
The bill would change a section of the Securities Act which currently enjoins the Advocate for Small Business Capital Formation to give particular attention to businesses owned by women and members of ethnic minorities.
The wording would be changed to, “
minority-owned small businesses, women-owned small businesses, and small businesses affected by hurricanes or other natural disasters.”
“I have witnessed firsthand the terrible impact hurricanes and other natural disasters can have on the economic outlook for small businesses,” Velazquez explained in her statement to the House Financial Services Committee. “For small businesses in Puerto Rico trying to recover from the effects of Hurricane Maria, the situation is much worse. 2017 was the costliest year on record for weather and climate disasters in the United States and the effects of Hurricane Maria on Puerto Rico’s small businesses are unprecedented.”
Reporting that two thirds of Puerto Rico’s small businesses closed after the hurricanes, Velazquez said that Nelson Ramirez, President of the Centro Unido de Detallistas, a small business advocacy group in San Juan, estimates that as many as 10,000 of these businesses will close permanently. FEMA estimates that fully 40% of small businesses will never be able to reopen. “Small and midsize businesses represent 90 percent of the private companies on the island and about one-third of the workforce,” Velazquez said in remarks to the committee.
The Puerto Rican Retail Trade Association estimated that the Island’s small business sector would lose $8.9 billion while waiting for electric power to be fully restored. They assumed that the grid would have been rebuilt by now. At best, the Island has only reached about 50% restoration of electric power. Over the weekend, San Juan was again plunged into darkness. Recovery is currently expected to take at least several more months.
“Nearly four months after Hurricane Maria, the Puerto Rican economy is at a near standstill and thousands of the island’s small businesses are teetering towards insolvency,” Velazquez concluded.
Rep. Maxine Waters (D-CA) added, “Far too many families in Puerto Rico and the Virgin Islands still do not have electricity, nearly five months after the hurricane hit. Although this bill is a first step, I would hope my friends on the opposite side of the aisle will also support other initiatives to help rebuild the lives of those living in the midst of a disaster.”
The bill passed in the House and moved on to the Senate, where it currently awaits committee consideration.