SBA loan aid starts flowing to riot-hit businesses.

But agency estimates full-scale help will take months

The Small Business Administration will begin handing out checks this week to business owners who suffered uninsured property damage and economic injury during the Los Angeles riots, according to Jill Finnie, spokeswoman for the SBA.

While seven or eight business owners will receive checks this week, it could take months for the majority of the riot-damaged businesses to receive government checks under the SBA's special disaster relief program, Finnie said. The federal government has made available $300 million in loans under the disaster program, she said.

It will take a while for SBA officials to process the loans, because of the sheer volume and because filling out the forms is time-consuming, requiring a lot of data about the business, such as tax returns for the last three years, Finnie said. As of last week, more than 9,600 business owners took applications for the federal, low-interest loans at 10 SBA centers around Los Angeles County, but only about 200 forms had been returned, she said.

More than half the applications, 4,873, were given to business owners who applied at the Koreatown loan application center, Finnie said. "They had a lot of damages and they were fairly well organized," she said of the surge of applications at the Koreatown center.

Jack Koulbanis, SBA loan team leader at the Koreatown center, said the application process has gone smoothly, despite language barriers, due to the efforts of volunteer interpreters from the Korean community. Local banks, including Nippon Credit Bank, have lent bilingual employees to help Korean business owners fill out forms, which are in English.

Koulbanis said there is no estimate yet for the average loss business owners have suffered during the riots, but loss figures vary wildly from one applicant to another.

Alvin Pedescleaux, an SBA loan officer working at the Koreatown center, said he has counseled a proprietor whose bowling supply store suffered damages of $10,000 and the owner of a mini-mall with $700,000 in damages.

Koulbanis noted some applicants have said they don't want to rebuild their businesses in Los Angeles, but in another city. "Some are frightened away. . . . I've seen a lot of people not clear as to what they want to do," he said.

Under the disaster assistance program, the SBA makes loans with interest rates of 4 percent and 6.5 percent, Koulbanis said. Historically, the majority are at 4 percent. Business owners can save thousands of dollars by applying for SBA loans, rather than bank loans, Koulbanis noted.

For example, with a 30-year SBA loan for $100,000, the borrower would pay $487 a month for 356 months, totaling a $173,372 repayment, Koulbanis said. If a borrower were to obtain $100,000 from a bank, with a low interest rate (by today's standards) of 8 percent, the borrower would pay $756 a month for 356 months, totaling $269,136.

"We want to make loans and we want to get money out at 4 percent," Koulbanis said.

The deadline for SBA loan applications is July 2 and those seeking information should call [phone].