NEW LOAN PROGRAM FOR BUSINESSES HURT BY WTC ATTACKS

BROOKLYN, NY, August 9, 2002-The Regional Economic Development Assistance Corporation has created a new emergency loan program for businesses that have not received World Trade Center disaster relief loans from other sources, said Joan Bartolomeo, president of the Brooklyn Economic Development Corporation (BEDC), which manages the loan program.

Emergency loans of up to $20,000 are available at 5 percent interest to businesses that employ fewer than 10 people, and are located below 14th Street or had at least 50 percent of their business activity from clients located below 14th Street as of September 11, 2001.

Although businesses that have already obtained disaster loans are ineligible, businesses that have received disaster grant money are eligible for the emergency loans. In addition, loan recipients will receive an $800 grant if they attend one of BEDC's technical assistance workshops.

To date, the Regional Economic Development Assistance Corporation has closed on two of the new emergency loans. The first two businesses to receive the loans are:

• Olga's Salon & Spa. Olga's Salon & Spa is scheduled to open in August at the corner of Broadway and Cortlandt, one block west of World Trade Center site. Olga Diaz, who has owned and operated her business for 18 years, will open the full service salon after a 10-month search for new space in Lower Manhattan. Her salon in the Marriott Hotel at the World Trade Center was destroyed on September 11.

• Megamorphosis, Inc. Megamorphosis, Inc., located at 70 Pine Street, three blocks west of the World Trade Center site, is a full service hair salon that has been owned and operated by Maria Santiago for 10 years. The salon experienced a 90 percent drop in business after September 11. Business has steadily improved in recent months and Ms. Santiago hopes to return to her pre-September 11 level by Thanksgiving 2002. 

"We are working in partnership with the Manhattan Borough Development Corporation to identify businesses hurt by the World Trade Center disaster that have not received loan assistance," Ms. Bartolomeo said. "The new emergency loan program is funded by grants from the Deutsche Bank Americas Foundation and J.P. Morgan Chase Foundation, and was created after area banks asked nonprofits how they could help businesses that didn't fit the criteria for traditional loans."

The new loan program is being offered in addition to the disaster relief loans of $5,000 to $25,000 that the Regional Economic Development Assistance Corporation began offering immediately following the attacks. By August 2002, the agency had made 22 disaster loans totaling $215,000 to 21 small businesses. 

"We created the new loan program because we felt that the $5,000 cap on some of our emergency loans was insufficient for most businesses," Ms. Bartolomeo said. "Also, with the credit criteria we were using, there were many people who fell under the bar and we wanted to be able to assist those business owners." 

The Regional Economic Development Assistance Corporation and Manhattan Borough Development Corporation are marketing the emergency loan program through the disaster recovery centers in Lower Manhattan and by handing out flyers directly to businesses near the World Trade Center site. Other nonprofits whose emergency loan funds are exhausted also are referring clients.

BEDC, a private, nonprofit organization, was established in 1979 to stimulate Brooklyn's economy and create job opportunities for the borough and its residents. BEDC has evolved into a multi-service, business-consulting agency, serving more than 1,000 clients annually and offering comprehensive economic development services.

The Regional Economic Development Assistance Corporation is a nonprofit loan program that offers loans of $5,000 to $50,000 to New York City for-profit businesses with sales under $2 million. Since it was created, REDAC has funded 93 loans in all five boroughs of New York City, creating almost 300 new jobs. Over 72 percent of the loans have been to pure start-ups, 44 percent of the loans have gone to minority firms, and 53 percent have gone to woman-owned firms.

More information about BEDC's loan programs is available from Michael Sharp at (718) 522-4600, Ext. 17, or www.bedc.org.