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

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     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.

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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:

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     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.

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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

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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,

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    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

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     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

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    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

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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

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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.
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     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

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gram, and  which should  help  you in pre-
paring  your application for technical review.
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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

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 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
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            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
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       SBA FIELD OFFICES





ADDRESSES AND TELEPHONE NUMBERS
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