In the wake of Hurricane Sandy, the owners of storm-damaged small businesses had a long list of needs, but at the top was grant money.
“From Day One, that’s been the common mantra,” said Tom Bracken, president and CEO of the New Jersey Chamber of Commerce. “Loans are OK, but grants are what we need, because a lot of these companies had their businesses wiped out. They had no cash flow, had no collateral, had no ability to repay loans. So grants are what they needed.”
Business owners finally got their wish last week, six months to the day after the storm came ashore. On April 29, U.S. Department of Housing and Urban Development approved a $1.8 billion spending plan that included a $260 million grant program for hurricane-impacted small businesses, part of $460 million in business assistance.
By 2 p.m. the next day, more than 300 businesses had registered for the program at the website of the New Jersey Economic Development Authority, which is overseeing the state’s business recovery initiatives.
The business aid package also includes a loan program, $25 million for tourism marketing and neighborhood revitalization funding. But Michele Brown, CEO of the New Jersey Economic Development Authority, said grants are the priority.
“What small businesses tell us they need is grant funding and immediate grant funding,” she said. “That will be of greatest assistance.”
The grant money will be given out on a first-come, first-served basis. Applicants are eligible for up to $50,000 in working capital, or $250,000 if the company has multiple locations. In order to get the money, businesses must prove an unmet need remains following any private insurance payments, U.S. Small Business Administration loans, or other assistance.
At last week’s special EDA board meeting, Brown promised a Shore-area resident the agency is working as fast as it can.
“This is really what we have been aware of every day,” Brown said, “that for people who are waiting for help to come, every day matters.”
It’s been a lot of days since Hurricane Sandy. It took three months — and a tongue-lashing from Gov. Chris Christie — before the U.S. Congress approved a $51 billion federal aid package in late January.
HUD announced the $1.8 billion disbursement on Feb. 6, and Christie submitted his plan for that money March 28, following a public comment period. HUD had 45 days to review that plan, but took only a month.
Bracken lamented the lengthy bureaucratic process, but said “you can’t fight city hall.”
“I’m sure that this has been pushed through as quickly as possible,” Bracken said. “But it’s government. It just takes time.”
Down the Shore, the news was taken in stride. Businesses are happy to have the money, but they’re also hard at work trying to get open by the summer.
Maureen Stankowitz, president of the Toms River-Ocean County Chamber of Commerce, said many business owners also have to worry about rebuilding their homes.
“The sooner they would have gotten this money, the sooner they could have started the building process,” Stankowitz said. “But they still don’t know how high to raise their houses. So it’s a Catch-22.”
Tourism-related businesses will be given priority in the grant program, but any small business with at least $5,000 in property damage can apply for a grant.
Bracken said the grants, which are meant to provide working capital, will help businesses far beyond the coast, “because there are companies who were suppliers of businesses to the Shore, so they lost customers.”
Summer tourist havens, meanwhile, fear further economic damage — not from the storm, but from poor public perception.
“The big challenge for us is to get the media attention on the fact that if you came to Asbury Park right now, you can enjoy the beach and the boardwalk as you would have in the beginning of October,” said Jackie Pappas, executive director of the Asbury Park Chamber of Commerce.
The boardwalk is pretty much back to normal, she said, and those businesses that were damaged — a relatively small number in Asbury Park — are mostly back up and running.
The state’s federally funded $25 million marketing campaign — set to hit the New York and Philadelphia airwaves later this month — is designed to help. Pappas said her chamber also is planning its own advertising push, shifting its off-season advertising budget to the summer. The campaign will be highly visual, she said, to combat the photos of destruction tourists saw on TV.
Still, parts of the Shore — and the economy — won’t be back to normal for months. The EDA expects to roll out a loan program in June, which is designed to fund larger-scale needs.
Bracken, though, said there’s good reason to get the grants out first. A state survey found nearly two-thirds of Sandy-affected companies said they needed $50,000 or less. At $260 million, Bracken said the program will undoubtedly make a dent.
“If you do the math on the grants, $50,000 divided by $260 million,” he said, “that’s 5,200 businesses.”
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