In the wake of Hurricane Sandy, New York and New Jersey businesses are doing everything they can to recover from damaged buildings and ruined inventory. One thing they aren’t doing though, according to the Wall Street Journal, is taking advantage of the U.S. Small Business Administration’s “disaster loans.”

These loans are at a fixed rate of 4% and are up to $2M in funds that affected businesses likely wouldn’t be able to qualify for otherwise. But the rate of approval is down after Sandy (22%) compared to after Hurricane Irene (30%) and Hurricane Katrina (53%).

The low number of accepted loan applications might be explained by the long and difficult application and acceptance process, or the fact that small businesses cannot afford more debt on their balance sheet. Credit terms are harsher than they were when Katrina hit, so small businesses also might assume they do not qualify and won’t apply.

This article goes to show that bank loans are sometimes an unattractive option to small businesses, who don’t want to go through the long application process and wait for funds when they need them desperately now. They are seeking alternative options that won’t create more debt and have a faster disbursement process.

For the full article, see Disaster Loan Rate Is Lower After Sandy