LOANS TO SMALL UNDER THE FEDERAL WATER POLLUTION CONTROL ACT-(92-500) ENVIRONMENTAL PROTECTION AGENCY OFFICE OF ANALYSIS AND EVALUATION 401 M STREET, S.W. I WASHINGTON, D.C. 20460 DECEMBER 1976 ------- The Federal Water Pollution Control Act of 1972 set as its objective to restore and maintain the chemical, physical and biological integrity of our nation's waters. To meet this objective, effluent limitations are being set on all industrial point sources into our nation's waters as well as pollu- tion from nonpoint sources such as farms and forests. Under Section 8 of this Act, which is entitled "Loans to Small Business Concerns for Water Pollution Control Facil- ities," amendments were made to Section 7 of the Small Business Act. Section 8 authorizes loans to assist small business con- cerns in adding to or altering their equip- ment, facilities, or methods of operation in order to meet the water pollution control requirements established under the FWPCA. The loans are to provide relief to certain small businesses and farmers who might otherwise suffer substantial economic injury without some financial assistance. The loans are provided when commercial loan sources are unavailable or can only provide part of the required loan. ------- WHO IS ELIGIBLE? Section 8 of the FWPCA authorizes the SBA to make loans to assist any small business concern in effecting ad- ditions to or alternations in the equipment, facilities, or methods of operation of such concern to meet water pollution control requirements under the FWPCA, if the con- cern is likely to suffer substantial economic injury without assistance. SBA has defined a "small" business in standards that are available at any SBA field office. In es- sence, the applicant must be an indepen- dently owned and operated small business, not dominant in its field, and must meet employment or sales size standards estab- lished by SBA. Applicants also will be subject to regulations promulgated by the Small Business Administration with regard to their type of business and financial eligibility. Recent legislation has been en- acted making farmers eligible for these loans as well. In addition, a small concern may be eligible for a loan if its requirement for a loan is a result of engaging in one of the following activities: ------- 1. The business has an effluent dis- charge requiring a National Pollution Dis- charge Elimination System permit under Section 402 of the FWPCA. 2. The business emits discharges through a sewer line into a publicly owned treatment works, and the city or town requires the pretreatment of the waste discharge. 3. The business plans to discharge into a municipal sewer system through the construction of a lateral or interceptor sewer. 4. The business is subject to the requirements of a State or regional author- ity for controlling the disposal of pollutants that may affect groundwater. 5. The business is subject to a Corps of Engineers permit for disposal of dredged or fill material. 6. The business is subject to Coast Guard or State requirements regarding the standard of performance of marine sanita- tion devices controlling sewage from vessels. 7. The business is implementing a plan to control or prevent the discharge or spill of oil or other hazardous substances. ------- WHAT THE LOAM MAY BE USED FOR Loans "shall be made only if ... such additions or alterations of the equipment, facilities or methods of operation are neces- sary and adequate to comply with the re- quirements established under the Federal Water Pollution Control Act." (Section 8(a) (2) (B)). This statement from the Act has been interpreted to mean that not all require- ments under the Act must be met by the work covered by the proposed loan. The only criteria for eligibility is that the proposed work must meet the 'necessary and adequate' test for one or more of the applicable stan- dards under the Act. In addition, loans may be granted for additions or alterations that will achieve a level of performance above the requirements as they now stand but which anticipate more stringent requirements being written into a permit or standards in the years to come. WHEN TO APPLY TO EPA Applications to EPA should be made after a permit or other official notification containing requirements is issued to en- placed upon you by the Environmental Protection Agency, Corps of Engineers, Coast Guard. State, municipality, or re- gional management authority. These re- quirements will specify certain conditions ------- or schedules to be met; only after these requirements are known can the determi- nation of necessity and adequacy be con- sidered. WHAT MUST AN APPLICATION INCLUDE An application need not be in any particular form. EPA will provide an option- al instructional guide in answering questions for certification statement. The application must include the following: 1. Name of applicant (including business name) Mailing address (Address of affected facility, if different, from above) 2. Signature of owner, partner, or principal executive officer request- ing the statement 3. Standard Industrial Classification (SIC) number for business for which an application is being sub- mitted (see Standard Industrial Classification Manual, 1972 edi- tion, or describe tne type of busi- ness activity if SIC is not known) 4. Description of process or activity generating the pollution to be abated by additions, alterations, ------- or methods of operation covered by application 5. Specific description of additions, alterations, or methods of opera- tion covered by the application. This would include, where appro- priate: a. summary of construction to be undertaken b. listing of major equipment to be purchased or utilized in operation c. purchase of any land or easements necessary to op- eration of facility d. other items deemed pertinent (information considered as a trade secret shall be identi- fied as such) 6. Declaration of requirement(s) for compliance with which alterations, additions, or methods of operations are claimed to be necessary and adequate 7. If you have received a permit from a State Water Pollution Control Agency within the preceding two years, and the permit was not an NPDES permit issued under the ------- Federal Act, and where the permit relates directly to abatement of discharge for which a statement is sought, a copy of permit should be included. 8. Any written information from a manufacturer, supplier or consulting engineer, or similar independent source, concerning design capabil- ities of the additions or alterations covered by the application. This would include warranties or certi- fications obtained from or pro- vided by such sources which would bear upon design or per- formance capabilities. (Require- ment ma}' be waived if there is no independent source for the informa- tion described). 9. Estimated schedule for construc- tion or implementation of altera- tions, or methods of operation 10. Estimated cost of alterations, ad- ditions, or methods of operation, and where practicable, individual costs of major elements of con- struction to be undertaken 11. Information on previously receiv- ed loan assistance under this sec- tion for facility or method of ------- operation, description and dates of activity funded 12. NPDES permit number if applicable. (A schematic diagram listing the major components of your abatement process would be most helpful and could re- duce the need for the submittal of ex- tensive plans and specifications.) WHAT COLLATERAL IS NECESSARY You, the applicant, must be in sound financial condition and give SBA reasonable assurance that the loan will be repaid. The applicant must pledge whatever collateral or give such guarantees as he can. When the SBA loan is used to acquire fixed as- sets, these must be pledged as security. Personal and/or business assets should be used to the greatest extent possible but it is not expected that they will be needed to the point of curtailing working capital or reserve requirements. LOAN MATURITY Loan Maturity is based on the appli- cant's need and earnings, but repayment must be made at the earliest possible date. The maximum term is 30 years with the ------- exact term for a particular loan to be ne- gotiated with the SBA. MUD fEES If a conventional bank loan is not available, SBA has several loan options avail- able. SBA may guarantee up to 90 percent of a loan to a small business firm or, if this financing is not available, SBA may enter into an immediate participation basis loan with a bank. A direct loan will be con- sidered if these other forms of financing are not available in an amount up to $500,000, which may be exceeded only if the Admin- istrator of the SBA finds substantial hardship. Within certain limitations the private lender sets the interest rates on guaranteed loans and on its portion of immediate participation loans. Interest rates on SBA's portion of im- mediate participation, as well as direct loans, may be obtained from any SBA office as the rate is subject to change, as it corresponds to the average annual interest rate on all interest bearing obligations of the United States. Note that only small business and farms are eligible for relief under the provisions of the Act. Before you go to the time, trouble, and expense of preparing an application, be very ------- sure of your size classification. If there is any doubt about the classification of your business see Part 121.3-10 of the Small Busi- ness Administration Rules and Regulations or contact your local SBA office to determine the applicable employee or sales standard. EPA'S TECHNICAL REVIEW The Environmental Protection Agency must perform a technical review of the appli- cation for SBA to determine that the pro- posed additions or alterations are necessary and adequate to comply with one or more applicable standards. You obtain this review by submitting two copies of the application for Statement of Compliance to the EPA Regional Loan Coordinator. Addresses are listed in this brochure for the EPA Regional Office in your Region. Processing time at EPA should generally not exceed 45 working days from the time a complete application is received. The review by EPA may result in one of three distinct determinations: a. Approval: A written statement will be provided to you attesting to this, with a copy sent directly to the appropriate SBA Office. 10 ------- b. Conditional Approval: Some of the items were acceptable and some were not. A copy of the conditional approval will be sent to the appropriate SBA Office. Appeal of the rejected portion may be made without prejudice to the approved portion. You may use a conditional ap- proval to secure a loan. c. Disapproval: You may make an appeal within 60 days directly to the EPA Deputy Administrator in Washington. The EPA review is for technical purposes. Do not send detailed company financial and credit data to EPA. EPA may empower States to conduct this review and to issue statements. SBA '§ FINANCIAL REVIEW Submit the EPA approval or condi- tional approval to the appropriate SBA Office with the completed SBA loan ap- plication. Once SBA has received your complete application package you should plan for a review time of about four weeks. INFORMATION For further information contact either the EPA Regional or SBA District Office. The EPA Regional Office will also be able to provide you with a copy of the regu- lations that were developed for this pro- 11 ------- gram, and which should help you in pre- paring your application for technical review. 12 ------- LOAN COORDINATORS AT EPA HEADQUARTERS Mi. Sheldon Sacks Small Business Loan Section Office of Analysis and Evaluation Room 831 East Tower (WH-586) 401 M. St. S.W. Washington, D.C. 20460 AC 202 755-7640 STATES COVERED EPA REGION I CONN. Mr. Ted Landry ME. Permits Branch MASS. Environmental Protection Agency N.H. Room 2109 R.I. John F. Kennedy Federal Bldg. VT. Boston, Mass. 02203 AC 617-223-5061 REGION II N.J. Mr. Stuart Roth N.Y. Status of Compliance Branch P.R. Environmental Protection Agency V.I. Room 10009, 26 Federal Plaza New York, N.Y. 10007 AC 212 264-4726 REGION III DEL. Matthew Miller MD. Staff Environmentalist PENN. Environmental Protection Agency W. VA. Curtis Building 3EN20 D.C. 6th & Walnut Streets VA. Philadelphia, PA. 19106 AC 215 597-3635 13 ------- ALA. FLA. GA. KENT. MISS. N.C. S.C. -TENN. REGION IV Mr. John Hurlebaus Program Support Branch Environmental Protection Agency 345 Courtland Street, N.E. Atlanta, Ga. 30308 AC 404 526-5793 ILL. IND. wise. • MICH. MINN. OHIO REGION V Mr. Merle (Bud) Tellekson-Mr. Gene Pinkstaff Surveillance and Analysis Division 230 South Dearborn St. Chicago, ILL. 60604 AC 312 353-5250 REGION VI ARK. Mr. Richard Duty, LA. Director, Water Division N.M. Environmental Protection Agency OKL. 1st International Bldg. TEXAS 1201 Elm Street 27th floor Dallas, Texas 75270 AC 214 749-1267 REGION VII KAN. Mr. Al Callier 1 MO. Engineering Branch ' NEBR. Environmental Protection Agency IOWA 1735 Baltimore Avenue Kansas City, Missouri 64108 AC 816 374-2725 14 ------- REGION VIII COLO. Mr. William H. Hormberg WYO. Office of Grants 1 MONT. Environmental Protection Agency N.D. Suite 900, 1860 Lincoln Street S.D. Denver, Colorado 80203 UTAH AC 303 837-3961 REGION IX ARIZ. Mr. Stan Leibowitz, Mr. Ray Seid CALIF. Permits Branch - Enforcement Division HAW. Environmental Protection Agency NEV. 100 California Street AM. SAMOA San Francisco, Calif. 94111 GUAM AC 415 556-3450 TRUST TERR. REGION X ALASKA Mr. Dan Bodien 1 ORE. Chief, Water Technical Compliance WASH. Section IDAHO Environmental Protection Agency 1200 6th Avenue Seattle, Washington, 98101 AC 206 442-1270 15 ------- SBA FIELD OFFICES ADDRESSES AND TELEPHONE NUMBERS 16 ------- ------- |