In August, Louisiana experienced a flooding event of historic proportions. Estimates are that 109,000 housing units were damaged, 20,000 businesses were interrupted, and property damages totaled $8.7 billion.
Two months after the event, Louisiana families and employers are at the beginning of a long and challenging road to recovery. This is especially true of small businesses across south Louisiana, the majority of which did not have comprehensive flood insurance, are not eligible for FEMA assistance, and whose only recourse is a federal Small Business Administration (SBA) loan between four and eight percent. More than 6,000 businesses flooded in 22 parishes and Congressional testimony has woefully noted that nearly half of businesses would likely never re-open after this disaster.
In response to this gap in federal and state support, the Louisiana Association of Business and Industry (LABI) and the Baton Rouge Area Chamber (BRAC) joined forces with Greater New Orleans Inc., the Louisiana Association of Chambers of Commerce Executives, the National Federation of Independent Business, and One Acadiana to create the Louisiana Small Business Rebirth Fund to provide triage grants to small businesses to help them get restarted.
In just three weeks, the Rebirth Fund received 800 applications from flooded small businesses seeking to rebuild, demonstrating the significant amount of unmet needs. Donors from Louisiana and across the nation contributed more than $650,000, which is being swiftly distributed to more than 100 Louisiana small businesses based on decisions of an independent review committee with technical, accounting, and legal expertise.
Behind each application for help is a hard-working Louisianan desperately trying to stay afloat and stay invested in their community. They want to come back, hire their fellow Louisianans and grow their business here at home. Many of them will not be able to do so without smart and timely recovery policies, that are responsive to their needs.
The challenges of flooded small businesses far outweigh available public or private support. Private grants will likely only be available for roughly one in five of these small businesses, which include daycares, doctor’s offices, restaurants, cabinet shops, grocery stores, retail, and more – services and products that make up the fabric of area communities. Each one has a compelling story and wants to rebuild.
While we remain extremely proud of this Fund and encourage as many people as possible to invest so that additional local employers may benefit, more must be done to ensure the recovery works for these small business job creators that serve as the backbone of our economy.
This week, the organizers of the Rebirth Fund senta formal letter to the Governor and other stakeholders, asking that they incorporate small business recovery as a top priority.
As the state makes plans for long-term recovery, we believe it is critical that the Governor, Legislators, and the newly appointed Restore Louisiana Task Force consider devoting a portion of Community Development Block Grant (CDBG) dollars to Louisiana’s small businesses after urgent housing needs are addressed.
Following Superstorm Sandy, New Jersey set the precedence for this type of effort. In response to the need, the state created the Stronger NJ Business program with grants and forgivable loans for small businesses of up to $50,000 for working capital, inventory, equipment, machinery, furnishings and prospective construction. A similar program for Louisiana could mean the difference between complete community recovery and smaller towns that look dramatically different in the future than before the flood.
Many of the jobs, services, and products of Louisiana’s small businesses are critical to the future recovery of flooded communities. We urge state officials to make decisions quickly, to minimize red tape, and to ensure affected homeowners and businesses have a voice in resource allocation to ensure the programs truly address the needs.
Louisiana truly is a unique state with a strong and resilient population. While it is a long road, the efforts of Louisiana’s hard-working, committed people must be supported in a way that brings our communities back even stronger. We stand ready to work with our elected and appointed leaders to implement a complete recovery for Louisiana’s homeowners and businesses.
Stephen Waguespack is President of the Louisiana Association of Business and Industry