RELATED TOOLS RELATED ITEMS Management Archives

Small-business owners around the country have gotten a jolt this summer from soaring electricity rates. In the San Diego area, the cost of power has soared so high that the Small Business Administration has offered some help.

One bagel shop in Chula Vista, for example, saw its July bill jump by $1,700, to $3,000. "That's three or four part-time employees for the month," says Donna Coviello, who opened the Bagel Bar four years ago.

While the agency isn't providing additional funds, SBA Administrator Aida Alvarez has called on banks in San Diego and Orange County to offer SBA-backed loans to companies facing a cash-flow crisis due to their energy bills. While SBA-backed loans are not typically used to cover utility bills, Alvarez said in a statement that the agency's loan program has "the tools to meet the need." Information about SBA loan programs is available at www.sba.gov.

It's unclear, though, just how helpful that outreach effort will prove to be. Banks are reluctant to make small-business loans of less than $100,000 because of the time and cost involved in processing applications and managing the loans. And for many small businesses, it may simply be easier to cut costs in other areas or reduce power use. Or to raise prices, as Coviello did when she bumped bagels from 59 cents to 79 cents each. "We're still paying our existing loan," she says, referring to the $150,000 SBA-backed loan that helped launch Bagel Bar. "There's a lot of work involved in getting a loan."