This bill amends the Small Business Act to provide disaster loans for small businesses and homeowners impacted by prolonged power outages, enabling them to invest in energy resilience and cover losses from spoiled goods.
Haley Stevens
Representative
MI-11
This bill amends the Small Business Act to allow small businesses to receive disaster loans for damages caused by prolonged power outages. These loans can be used to purchase energy resilience systems and replace spoiled food and drink. The bill defines "prolonged power outage" based on the number of affected homes and businesses, the extent of uninsured losses, and the duration of the outage.
Power Outage Relief: Bill Expands SBA Disaster Loans for Small Businesses Hit by Blackouts
This bill tweaks the Small Business Act to add 'prolonged power outages' to the list of events that qualify small businesses for disaster loans from the Small Business Administration (SBA). Essentially, if your business gets hit hard by a lengthy blackout, you might be eligible for financial help.
Keeping the Lights On (and the Fridge Cold)
So, what can you use these disaster loans for if you qualify? The bill specifies two main things:
- Energy Resilience Gear: You can use the loan funds to buy and install systems that help keep your power on during future outages. Think generators, solar panels with battery storage, microgrids, or even fuel cells. This is about helping businesses bounce back and prepare for the next time the grid goes down.
- Replacing Spoiled Goods: If you're a restaurant, cafe, or grocery store, a long power outage can mean a devastating loss of inventory. This bill allows businesses to use loan money to cover the cost of replacing food and drinks that spoiled because the power was out.
What Counts as 'Prolonged'?
The bill lays out specific definitions for a "prolonged power outage," and it depends slightly on the type of SBA loan being sought:
- For loans covering physical damage (under paragraph 1A of Section 7(b)), it means a power loss hitting at least 25 homes or businesses (or a mix) in an area, where each suffered uninsured losses equal to at least 40% of the damaged property's value.
- For Economic Injury Disaster Loans (EIDL, under paragraph 2), it means at least 25 homes or businesses (or a mix) in an area lose power concurrently for a minimum of 48 hours.
These definitions aim to provide clear benchmarks for eligibility.
Real-World Impact: A Safety Net for Blackouts
This change directly addresses a gap in disaster support. Previously, a small business crippled by a week-long power outage might not have qualified for the same SBA help as one damaged by a hurricane, even if the financial hit was similar. This bill recognizes that prolonged power loss is a disaster for many small businesses. By expanding Section 7(b) of the Small Business Act, it offers a financial lifeline, helping businesses cover immediate losses (like spoiled inventory) and make long-term investments (like backup power) to better withstand future grid failures. This could be particularly helpful for businesses in areas facing more frequent or severe weather events impacting the power supply.