Photograph by Justin Lane/EPA via Corbis
It’s been one year since Hurricane Sandy landed on the East Coast—enough time, one would think, to assess the damage wrought by the storm and get relief funds into the hands of business owners. Not so. Entrepreneurs in states affected by the storm have mixed experiences accessing grants and emergency loans.
Last week, the Associated Press reported that New Jersey is still processing hundreds of grant applications related to Sandy, while New York is “expediting” grants for businesses recovering from disasters as far back as Tropical Storm Lee in 2011. The U.S. Small Business Administration also has plenty of work to do to get disaster loans into the bank accounts of Sandy victims: The agency has approved $2.4 billion in loans related to Sandy, but has disbursed only 24 percent of that funding.
There’s a good reason for the lag, SBA spokeswoman Carol Chastang explained last week: Borrowers must provide additional documentation after they are approved, and funding is often released in a series of tranches.
Not everyone has been understanding. New Jersey Governor Chris Christie blasted the SBA in August, joking that he was stationing troopers along the state’s border to keep the agency’s workers from coming back. (Residents say the governor’s rebuilding program hasn’t been so easy to deal with, either.) In September, the owners of a boardwalk pizza stall on the Jersey shore said the SBA rejected “their disaster loan application because they didn’t have a commercial lease—their landlord put the damaged building up for sale—and they could not produce tax records, which were soaked in the flood.”
Lars Akerlund, who owns a string of five Manhattan coffee shops called FIKA, is pleased with the SBA disaster loan program. He says FIKA suffered nearly $600,000 in damages from the storm, including the destruction of chocolate-making equipment at a flooded factory and lost sales at shops that suffered power outages. His insurer wouldn’t pay for damages because the flooding was caused by ocean water. “That’s when the stress started,” he says.
To begin replacing ruined ovens, refrigerators, and chocolate-making equipment, Akerlund loaded his American Express (AXP) card with $150,000 in debt. In January, the credit-card company told Akerlund he had to start paying off charges. “I called the SBA and said, ‘When, when, when is my loan coming through?’” A week later, Akerlund was approved for a $550,000 loan. He says he received the full amount later that month and reopened all his stores, as well as his flooded chocolate factory, by March. Business rebounded, and Akerlund found a new investor who is helping to open six new stores in the months to come. “It took a while to get the loan, but you can understand that,” he says. “Imagine how many thousands of people called them.”