Jack n Bills employees Tim Perruso (L) and Rob Ciliento prepare the bar for its opening for the summer tourist season almost five months after Superstorm Sandy caused damage to the structure in Seaside Heights, New Jersey. (LUCAS JACKSON/REUTERS)

In the aftermath of Hurricane Sandy, the Small Business Administration took roughly twice as long as intended to approve disaster loan applications from home and business owners, according to the results of a federal probe.

The Government Accountability Office found that the federal agency took 45 days on average to process disaster loan requests for damage to business goods and property, and 38 days to process financing requests to cover economic losses resulting from the storm. Both were well above the 21-day turnaround goal set by the SBA.

Additionally, the agency has not yet revised its disaster plans to address the problems, “which may result in delays in loan funds for disaster victims” in the future, nor has it implemented a disaster loan program that was authorized by Congress six years ago to hasten the flow of disaster loans, the investigation concluded.

“The agency was caught flat-footed,” Rep. Nydia M. Velázquez, the top-ranking Democrat on the House Small Business Committee, said at a news conference late last week. The representative from New York asked the GAO to conduct the evaluation after it became clear last year that aid was moving slowly to victims in the Northeast.

“Missteps, a lack of planning and an inability to right the ship quickly left businesses frustrated and unable to secure the financing they needed,” she said, adding that small-business owners “needed financial assistance in days, not months.”

Ultimately, not quite half of the small-business owners (42 percent) who applied for assistance after Sandy received a loan, according to the GAO. That’s higher than after Hurricane Irene but a lower rate of approval than for victims of Katrina, Rita and Wilma.

SBA officials say they were overwhelmed by an unexpectedly high volume of loan requests that came in during the first several weeks following the storm. They had anticipated that loan application volume would peak seven to nine weeks after Sandy struck. The agency simply wasn’t ready yet, they said.

In addition, the agency, which handles the federal government’s disaster loan programs for both homeowners and business owners, said it faced a surge in applications from residents whose homes were damaged by Sandy, and that was partially responsible for the backlog of applications from small-business owners.

Ann Marie Mehlum, the agency’s associate administrator for capital access, stated in a letter responding to the GAO that the SBA has taken and intends to continue taking steps to improve its disaster response programs and process applications more quickly.

“SBA is firmly committed to providing affordable disaster loan assistance quickly and effectively,” she wrote.