"Some fuel suppliers could go out of business this winter because of the high energy prices. This could be devastating for residents, particularly in rural areas, who would be left without anyone to deliver their heating fuel for the winter," said Senator Collins.
In the letter, Senator Collins wrote, "Many small businesses are being adversely affected by the substantial increases in the prices of heating oil, propane, kerosene, and natural gas. The recent volatile and substantial increases in the cost of these fuels is placing a tremendous burden on the financial resources of small businesses, which typically have small cash flows and narrow operating margins."
Senator Collins explained that SBA disaster loans are an appropriate source of funding to address the problem that fuel distributors are facing, because hurricanes that caused significant damage to the Gulf Coast along with the current instability in Iraq, Nigeria, and Russia caused a surge for the price for oil and other refined products, especially heating fuels. In addition, the higher energy cost makes it much more difficult for distributors to cover their budget gap between when they purchase their oil supply and when they are able to deliver and collect payment from their customers.
"The conditions restricting these small businesses' access to capital are beyond their control and SBA loans can fill this gap where commercial lenders typically will not," said Senator Collins. A similar provision was approved by the Senate with bipartisan support during the 107th Congress, when heating fuel distributors faced a similar increase in energy prices.
The other Senators signing onto the letter are: Jack Reed (D-RI), John Kerry (D-MA), Jeff Bingaman (D-NM), Arlen Specter (R-PA), Patrick Leahy (D-VT), Christopher Dodd (D-CT), Lincoln Chafee (R-RI), Edward Kennedy (D-MA), Frank Lautenberg (D-NJ), Jim Jeffords (I-VT), Joseph Lieberman (D-CT), Evan Bayh (D-IN), and Charles Schumer (D-NY).
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