Budget and staffing cuts could hamper the U.S. Small Business Administration's response to hurricane victims, according to the American Small Business League.

The agency's relief efforts during Hurricane Katrina proved inadequate and the response to this year's storms, including Dolly, Gustav and Ike, could be worse, said Lloyd Chapman, president and founder of ASBL.

"During Katrina, the SBA hired thousands of temporary workers who didn't know anything about anything, slowing down the government response time," Chapman said. "Some (applicants) are still waiting for their loans."

A Government Accountability Office report from 2007 found that the SBA struggled to train and supervise thousands of temporary employees in the aftermath of Katrina.

In addition, the processing time for disaster loan applications averaged 74 days and was considered a factor in hundreds of cases of fraud.

Earlier this year, the SBA Office of Inspector General released a report that the high volume of applications caused a backlog of more than 90,000 undisbursed loans.

To expedite disbursement, SBA launched a 90-in-45 Campaign to resolve the backlog. However, in January of this year, the SBA had only dispersed $6.3 billion while approving more than 160,000 disaster loans.

"People are probably under the impression that they can fill out some paperwork and get a check in a few weeks when it could take more than two years," Chapman said. "What good is that? By the time the check comes you'll already be bankrupt."

Concerns that the SBA is unprepared are overstated, said Ben Raju, spokesman for the SBA.

After the chaos of Katrina, the SBA established a reserve supply of 2,000 additional employees that it can call upon as needed. The employees are trained and, in fact, they have been called on recently to assist with the volume of relief applications expected from Hurricanes Gustav and Ike.

"We're not anticipating a slowdown in applications," Raja said. "We have the structure in place to accommodate the load we're expecting."

Businesses, renters and homeowners in presidentially declared disaster areas are eligible for low-interest SBA loans. Homeowners and renters can qualify for as much as $200,000, while businesses are eligible for $2 million of under-insured or uninsured losses from the storm.

The ASBL maintains that despite the adjustments, temporary staffing at the SBA is insufficient to meet business needs.

Since taking office, President Bush has cut the SBA's budget from $866 million in 2000 to just shy of $572 million for 2008.

With several storms making landfall through the midpoint of the hurricane season, Chapman added, the SBA may be forced to resort to hiring inexperienced temporary workers.

"Even if the magnitude of disaster is not as big as Katrina, the SBA is even more handicapped," Chapman said.