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-
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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
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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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