SBA, IRS Helping Businesses Hurt by Sandy
(NEW YORK) — Beleaguered businesses in and around New York City, still recovering from Hurricane Sandy, are beginning to get relief in the form of government loans and tax breaks.
In communities like Red Hook in Brooklyn, the storm surge affected enterprises big and small: The sprawling Fairway Market chain saw the ground floor of its Red Hook market — located in a 19th Century brick warehouse — destroyed by the same wall of water that flooded out the basement of tiny textile and stationery boutique Foxy & Winston a few blocks away.
At the Brooklyn Navy Yard Industrial Park, Dal LaMagna, CEO and president of IceStone USA, has applied for a Small Business Administration (SBA) loan of $1.9 million. The company, which turns recycled glass into counter-tops, employs 39. After years of losses, it was just starting to turn the corner into profitability when Sandy knocked it for a loop.
“Sandy slammed the door shut in our face,” says LaMagna. “Our inventory was completely submerged. All our marketing materials were under water.”
So, too, were 60 electric motors and 70 electrical outlets. Five forklift trucks will have to be replaced. His insurer, he says, told him he was out of luck because IceStone’s coverage did not include coastal flooding.
“We can’t afford to replace the equipment,” he says. “The only good news: We may get an SBA loan. We applied for one immediately. We wanted to make sure we were at the head of the line. I can’t imagine how many will apply.”
And if he doesn’t get it, “We’re done,” LaMagna says. “We’ll have to close. My goal is to save 39 people’s jobs.”
Bill Sanford, CEO of Fairway, tells ABC News his Red Hook inventory is “a total loss.” Though Fairway was “very well insured” against a catastrophe, he does not rule out the possibility that the company may eventually seek assistance from the SBA, which is making loans of up to $2 million to companies struggling to get back on their feet.
Over at Foxy & Winston, owner and artist Jane Buck says, “Our basement is a mess.” Her losses include a box of children’s T-shirts ($600), which she accidently dropped during the storm, only to see it swept away by floodwaters.
Though business is slow, she’s managed to reopen.
“I’m one of the lucky ones,” she tells ABC News. It may take a month, she thinks, for neighboring businesses to be up and running again.
Buck says she’s aware of the loans being offered by the SBA and is thinking of applying — in her case, for $25,000.
“Part of me says the money ought to go to someone more in need than me,” she says. “But maybe three months from now I’ll wish I’d borrowed. The interest rate is just 1 percent. Part of me thinks I should get in line.”
Carol Chastang, press liaison for the SBA, says anyone can apply for these loans — you don’t have to be a small business owner, nor do you have to own a building or a home. Renters are eligible, so, too, are non-profits. Of the several kinds of loans available, some cover damages to structures and property, others are meant to supply funds for payroll and other operating costs.
Borrowers, depending on their financial health, can get up to 30 years to repay. The loans are the same kind as were offered after hurricanes Irene and Katrina.
The IRS also is offering relief. Under certain circumstances, affected business owners will be given additional time to file returns and pay taxes. The service also provides advice on reconstructing lost or damaged business records.
Copyright 2012 ABC News Radio