News
SBA urged to adopt changes to make credit more available to heating oil dealers
By Governor Rell's office
Jul 15, 2008 - 1:32:22 PM

Governor M. Jodi Rell today announced she has urged the regional head of the federal Small Business Administration to make a change in its regulations that will ensure small home heating oil dealers are able to get the credit they need this fall to continue making deliveries to customers.

Local dealers often need sizable lines of credit to take deliveries from heating oil wholesalers. Because the price of heating oil has increased so dramatically – and may continue rising right through the summer and into the fall – smaller dealers face the possibility of being unable to pay “up front” for the oil they need to make retail deliveries to individual homes and businesses. Such credit problems could drive smaller dealers out of business, creating holes in the delivery network and leaving customers with pre-paid contracts in the cold – literally and figuratively.

“Under the change I am asking the SBA to adopt, the business size standard for heating oil dealers would be switched from $11.5 million in average annual receipts to 50 employees,” Governor Rell said. “That is a much more stable measure, since annual receipts have fluctuated greatly with the price of oil, demand and other factors. Adopting a more stable standard will mean these oil dealers can get the credit they need, buy the oil and deliver it to their waiting customers.

“As concerned as I have been throughout the recent months about the effects energy price spikes are having on Connecticut families and businesses, I am still more concerned about the coming winter,” the Governor said. “We know that families caught between the burdens of unprecedented food prices and unbearable energy prices are making difficult choices. My Administration is looking for every advantage we can give the hard-pressed consumer, and that includes making sure oil dealers have the credit they need to stay in business and keep their customers warm.”

In recent days, Governor Rell has also urged Congress to increase the amount of federal funding available for the Low Income Home Energy Assistance Program (LIHEAP). LIHEAP is the primary funding source for the Connecticut Energy Assistance Program, or CEAP.

In order to deliver the same amount of fuel as in 2005-06, LIHEAP funding for New England states would need to be increased to $430 million, an increase of 61 percent over last year’s budget.

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