In this Tuesday, Dec. 4, 2012, photo, General Manager Ludmila Silva and proprietor Adam Weprin, of the Bridge Cafe, in New York's South Street Seaport, take down the restaurant's neon sign at the restaurant. Like many small business owners in the Northeast whose stores, restaurants, factories and offices were devastated or destroyed by the Oct. 29 storm, Weprin is hoping that federal, state and local officials will quickly come up with grants to help him rebuild and survive. (AP Photo/Richard Drew)
New York ? As Adam Weprin looks over the damage to the Bridge Cafe caused by Superstorm Sandy, he wonders where ? and when ? he?ll get the money to repair his Lower Manhattan restaurant.
Stores, restaurants, factories and offices across the Northeast were damaged or destroyed by the Oct. 29 storm. So far, almost all the recovery money that?s being offered to small businesses by government agencies is in the form of loans, but taking on debt is one of the last things owners want to do as they try to recover from the storm in an already challenging economy.
Grants that don?t have to be repaid are a more desirable option for most owners ? and after the Sept. 11, 2001 terror attacks and Hurricane Katrina, many small business owners were saved by these kinds of funds. But so far, grant money for small businesses hurt by Sandy is relatively scarce. While many larger businesses also have big recovery costs, the need is more urgent for small companies because they tend to have fewer reserves and are more dependent on cash flowing in daily. Small business owners that don?t get back to business fast could be forced to close their doors forever.
In New York City, Mayor Michael Bloomberg has announced $5.5 million in grants for small businesses from two not-for-profit organizations, the Mayor?s Fund to Advance New York City and the Partnership for New York City. But that won?t go far, considering that thousands of businesses suffered damage, many of them into the hundreds of thousands of dollars. Citywide, the damage estimate for homes and businesses was put at $19 billion. In New Jersey, the cost of recovery and rebuilding from the storm was an estimated $37 billion. All told, Sandy caused an estimated $62 billion in damage in the Northeast and Mid-Atlantic states. It?s not known how much of the damage was suffered by small businesses.
Weprin is hoping that federal, state and local officials will quickly come up with grants to help him rebuild and survive. There are a number of efforts under way with grant money available from nonprofit groups, fundraising activity and even from one of the utilities serving New York City. But most of the grants are tiny in comparison with what many companies need.
Weprin can get a grant of $20,000 from a business group called the Downtown Alliance. He estimates it will take at least $300,000 to rebuild the basement of his 218-year-old building which was flooded by water from Sandy?s storm surge. He?s not sure what he?ll get from insurance.
"Twenty thousand is a hiccup," he says. After Weprin?s wood-frame building was flooded, the timbers in the basement were ruined ? he describes the wood as now having the consistency of sponge cake.
Another $10,000 grant is available from the $5.5 million fund Bloomberg announced, but only if Weprin takes out a $25,000 disaster loan from the city?s Emergency Loan Fund. "I don?t need another loan on my head."
Other business owners have expressed the same sentiment as Weprin, but loans are the first thing owners hear about when they ask for disaster relief help. The Small Business Administration, state and local governments and economic development organizations are some of the big sources of loan money. Corporations such as Goldman Sachs Group Inc. and JPMorgan Chase & Co. have contributed money to loan funds. The SBA loans have a low interest rate of 4 percent, and some of the loans in New York are no interest for the first six months.
Government websites in New Jersey tell business owners where they can apply for loans. So far, the only grants being offered are to help train workers to assist in cleanup and construction, according to Ernest Landante, a spokesman for New Jersey Lt. Gov. Kim Guadagno.
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Many small business owners can?t imagine the idea of taking on more debt, says Linda Baran, president of the Staten Island Chamber of Commerce.
"Many businesses have loans out, especially with the way the economy was the last couple of years. They feel that by taking out another loan, it?s just putting them deeper in debt," Baran says. Staten Island is the southernmost of New York City?s five boroughs and was hit particularly hard by the storm.
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?I would dance in the street for a grant?
There is some good news. Small businesses on Staten Island and in the boroughs of Brooklyn and Queens are getting grants of up to $250,000 from National Grid, which supplies natural gas to parts of the city. The utility says the grants will go to its hardest-hit small business customers including stores, factories, warehouses and multi-family dwellings like apartment buildings. It?s part of a $30 million program that will also give grants to homeowners and other residential customers.
The small business grant program is similar to one National Grid created in 2011 for upstate New York companies and farms hit hard by Hurricane Irene, says Ken Daly, president of National Grid-New York.
"These are for customers who have to make a big decision, do they reopen or shut down," Daly says. He expects that the program will help hundreds of small businesses. National Grid has about 1,000 to 2,000 business customers in the flood zone where Sandy hit.
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