Democrat and Chronicle staff and wire reports

(Monday, February 4, 2002) -- The Small Business Administration has approved more than $250 million in Sept. 11 disaster loans for about 3,100 businesses in New York City.

"We are proud to achieve this new milestone in our commitment to keep New York open for business," SBA Administrator Hector Bareto said.

Some critics say the SBA loan program was not directing enough money to the hardest-hit area in downtown Manhattan and was requiring that loan applicants put up collateral such as their homes to guarantee loans. Some owners near the collapsed World Trade Center are unsure when business will resume and so are hesitant to pledge collateral on a loan.

But SBA officials pointed to recent legislative changes that give loan recipients a two-year grace period before they must begin repayment. That's up from five months. The cap on the loans has also been increased to $10 million.

Businesses that sustained physical damage have until March 11 to apply for loans and those filing for economic hardship have until June 11.

Locally, the Economic Injury Loan Program application deadline has been extended to April 22. The program provides loans to small businesses that were affected by the terrorist attacks Sept. 11.