By Howard Weiss-Tisman

Soon after Tropical Storm Irene destroyed the Flat Street Brew Pub and Restaurant, co-owner Chris McInerney realized that the federal government was not going to be much help in rebuilding.

FEMA, McInerney learned, was largely responsible for helping home owners get back on their feet, and the U.S. Small Business Administration's application requirements were complicated and onerous, and their rates were not any better than the local banks could offer.

"It was disappointing and frustrating that there was not much more they were able to offer," McInerney said Monday, almost one year after the natural disaster. "When you looked at what they were offering, it did not make sense for us."

Over the past few months U.S. Rep. Peter Welch, D-Vt., has heard similar stories from business owners across the state, and now Welch wants the SBA to come up with a plan that works better for small business owners.

Welch has sent a letter to SBA Administrator Karen Mills asking her to create a new microloan program within the agency's existing disaster relief program.

Welch wants SBA to offer loans that have more reasonable terms and that come with fewer paperwork requirements.

The new program would be available to businesses with fewer than 50 employees, Welch said.

Welch's request came after he met with small business owners around the state following the storm of Aug. 28.

"Many of our small businesses were besieged in the aftermath of the storm. Employees were working around the clock with a monumental clean-up task. They simply were unable to simultaneously compile the paperwork required to apply for a SBA disaster loan," Welch said in his letter to Mills. "In some cases the required three years of financial history had just been washed down the river."

Irene caused about $300,000 in damage to the Flat Street Brew Pub and Restaurant.

The business used to employ the equivalent of 15 full-time employees. There are six full time employees now, and the basement level restaurant is still closed.

McInerney said he and Flat Street co-owner Steve Pardoe did begin the SBA loan process.

The application was 20 pages long, the agency demanded additional tax records and information, and McInerney and Pardoe were even asked to put their homes up as collateral and to list their family's assets.

McInerney said the federal loan process, in the end, was nothing more than a waste of time.

He compared the federal process to the Vermont Economic Development Authority, which had a three page application, a 1 percent loan rate and, was able to give an answer in a matter of days.

"It was simply not the smartest choice for us to go with SBA," McInerney said. "At the end of the day SBA did not offer anything that we could not get through a local bank where we are able to meet with someone face to face."

After Tropical Storm Irene, SBA distributed 1,900 business disaster loan applications, according to Welch. Only 234 applications were completed and SBA approved 137 loans.

SBA has the authority to create the new microloan program and Welch is asking for a meeting to help jumpstart the process.

He said the current loan program is written for large businesses, and the paperwork, turnaround time and rates do not work for small businesses with a handful of employees who are trying to recover from a natural disaster.

"These businesses needed small amounts of cash immediately in order to make necessary repairs to reopen," Welch wrote to SBA. "Their financial needs were far below the maximum loan amount for a SBA disaster loan."

Welch wants SBA to make loans available sooner after a disaster so businesses can get their doors open as soon as possible.

"Nearly nine out of ten businesses in Vermont have less than ten employees," Welch said. "The current program should accommodate their special circumstances with smaller loans, faster turnaround times and less paperwork."

SBA spokeswoman Emily Cain said in an e-mail to the Associate Press Monday that Welch's proposal would require legislation from Congress but she added, "We look forward to working with Congressman Welch and other members of Congress on ways to further improve the federal disaster loan process."

She said the SBA is committed to providing homeowners, renters, and businesses in Vermont and other states with "the most effective and customer-focused response possible."

The SBA recently announced a streamlined electronic disaster loan application process "that saves time and is more user-friendly, making the first steps toward recovery more convenient," Cain said.