Post-9/11 loans to isles
totaled $6.1 million

Some businesses say they
were not told their loans came
from any emergency fund

Fifty-nine small businesses in Hawaii took advantage of the U.S. government's $5 billion effort to help them recover from the Sept. 11, 2001, terrorist attacks, according to research by the Associated Press.

Companies here received $6.1 million in low-interest, government-guaranteed loans from two terror assistance programs administered by the Small Business Administration, the AP found.

Hawaii's economic engine, tourism, suffered immediately and severely in the months after the attacks.

Many of the isle companies were tourism-related businesses, such as tour operators. Others included clothing companies, restaurateurs, a cookie company, flight schools, a graphic design firm and a toilet maker.

"It was needed and it was used appropriately," said Sandra Akina, owner of Akina Bus Service Ltd. and Akina Aloha Tours Inc. on Maui, which used two loans totaling $400,000 to pay bills.

Akina said the loans helped her company weather the tourism downfall and pay for everything from insurance to payments on her vehicles.

Under one of the programs, SBA lent money directly to companies -- such as Akina's -- that provided detailed statements on how they were hurt. The other program provided incentives -- and guaranteed loans from default -- so banks could lend money to companies they determined were hurt by the post-9/11 economic downturn.

Most loans were well below market rates -- as low as 4 percent, documents show.

The 59 loans to Hawaii businesses averaged $104,000 and ranged from $1 million to Maui's Waterway Corp. to as little as $5,000 to Hilo's Frame It! Hawaii.

James Stoeckel, owner of the custom picture frame shop, said new shipping restrictions implemented by the Federal Aviation Administration delayed getting his materials from the mainland and strained his one-man business. His shop also suffered because many of his customers were employed in the struggling hospitality industry.

He saw the ad for the 9/11 emergency loans in the newspaper and decided to apply, otherwise "there was a 50-50 chance I would've had to close."

"It helped tremendously -- and it's almost paid off," Stoeckel said.

But some businesses said they were unaware their loans were drawn from 9/11 programs.

"They didn't tell us that, nor did we request a special fund," said Doug Ewalt, owner of Hawaii Nautical Inc.

According to the SBA, Ewalt's tour boat company received a $675,000 Supplementary Terrorism Activity Relief (STAR) loan.

Ewalt said he used the funds to purchase a new 53-foot catamaran to expand his tour company.

He is not alone. Businesses across the country received SBA loans from banks without ever being told about the 9/11 connection.

"I just applied for the loan at the bank. I had no idea where the funds came from," said Tom Mayl, who got two SBA 9/11 loans totaling more than $800,000 to open a Subway shop in suburban Dayton, Ohio, and a Buffalo Wild Wings restaurant in Sidney, Ohio.

SBA documents obtained by AP show banks had a strong incentive to approve as many loans as possible from the terror program. The banks profited from the interest while incurring little risk because the government guaranteed 75 percent to 85 percent of each loan.

Wells Fargo, the nation's second-largest SBA lender, said the STAR program enabled lenders "to provide funds to new and mature businesses impacted by 9/11," and the bank "continues to strictly adhere to SBA operational standards for all SBA loan originations."