Mapunapuna firms offered help

By Will Hoover
Advertiser Staff Writer

Dozens of business owners met with state officials yesterday in Mapunapuna to learn how to get assistance through the state's disaster loan program to offset losses that the owners estimate at $20 million.

That was "just a ballpark figure in the beginning," said Bob Freeman, president and CEO of Mr. Sandman Inc. on Ahua Street, who compiled a list of around 36 companies in the industrial zone that were hurt by recent flooding. "But as I'm accumulating more and more numbers, it seems to be right on."

Freeman said the figure could change, as most businesses were still assessing their losses.

Owners who attended yesterday's meeting mostly had businesses that had suffered damage after nearly two feet of floodwater swept through their facilities during heavy rains Dec. 7 and 8. State and city officials and representatives of local financial institutions also attended.

Thomas Smyth, administrator of the Business Support Division of the state Department of Business, Economic Development & Tourism, apologized for the short notice late Tuesday afternoon, but said it was important to let business owners know the terms and conditions of the assistance program. Eligible owners have until March 21 to apply for loans of up to $75,000 at a fixed 5 percent interest rate.

The money became available after Hawai'i Gov. Linda Lingle issued a statement of disaster Dec. 23 for Mapunapuna, Moanalua, Salt Lake and Foster Village. Smyth said the loans would cover physical and inventory damage, labor costs and loss of business due to floodwaters.

But because loan rates are so low, he said, owners might be better off borrowing from banks, which have fewer restrictions. The state program is designed only to restore an operation to its pre-damage status, he said. "We're not allowed to make you better than you were before."

Also, to request disaster loans, applicants have to be turned down first by two banks, to prevent a situation in which taxpayers are competing with banks.

The disaster loan terms, normally five to seven years, can be extended for as long as 20 years, Smyth said. The state and banks also can work together on a participation loan, which can help an owner borrow more than $75,000, he said.

Rick Reed, president of Inter-Island Solar Supply, which had extensive flood damage, questioned the state's logic about competition for loans, saying in extraordinary times banks should welcome any program that will make repayment easier. Many operators already are overloaded with debt, he said.

"I just think the criteria should be more flexible," Reed said.

Reach Will Hoover at 525-8038 or whoover@honoluluadvertiser.com.