Province to help flooded firms
Loan schemes will help with cash flow
The provincial government announced two new programs Tuesday aimed at getting floodaffected small businesses back on their feet.
The Alberta Flood Recovery Loan Guarantee program will provide low-interest loans of up to $1 million to small businesses, agricultural organizations and non-profit organizations that need help rebuilding. The loans will be offered through financial institutions and the Agriculture Financial Services Corporation (AFSC) and 75 per cent guaranteed by the province.
The province will also provide recipients of these loans with rebates of four per cent interest for two years, through the Alberta Flood Recovery Interest Rebate program.
“This financial assistance will help to bridge short-term credit issues, as well as longer term financial needs as businesses recover,” said Finance Minister Doug Horner. “They need financial assistance now, not weeks from now when insurance claims and disaster recovery payments might be fully processed.”
Horner met with the province’s financial institutions Monday to hammer out the details of the plan, which is expected to cost the government $120 million. He said banks will be ready to accept applications “almost immediately,” and applicants should have cash in hand within 24 to 48 hours of applying.
Horner said he has also asked banks to temporarily hold off on foreclosures and collections when it comes to flood-affected businesses.
“These organizations are the backbone of our economy and our communities,” he said. “If our province is to recover from this devastation, then we must do what we can to get them back on their feet.”
The province estimates that close to 1,500 small businesses were affected by the June flooding, and they are all in different stages of recovery. Some, like Cruffs Cream Puffs in Calgary’s Mission district, are still closed. While Cruffs suffered minimal physical damage, its building is still without power and co-owner Mario Adiwibawa said the business has lost a month of revenue.
“I had to let go of four staff, because we have no work for them,” Adiwibawa said. “(This business) has been our dream, our baby. We’ve been working hard for two and a half years, putting our sweat and time and life into it.”
Adiwibawa said he desperately needs some cash flow to tide him over, as the building’s landlord still expects him to pay rent, even though the power has been out and the space is not functional.
“I’m in a limbo. Literally, I don’t know what to do,” he said.
Calgary Chamber of Commerce president Adam Legge welcomed Tuesday’s announcement, though he said he wished it had come sooner.
“Seeing the province stepping up and creating some additional financial support to affected businesses is exactly what we were hoping for.
It seems to be a pretty farreaching program,” he said. “I ideally would have liked to see the province respond to the business community as quickly as they did to the residential community, though ... We’re now well past day 30, so I’m disappointed it didn’t come out as quickly.”
Legge said in Calgary alone, there are between 100 and 150 small businesses that remain closed in the aftermath of the flood. He said that while the new programs will go a long way to help, there will be some businesses that never recover.
“The reality is, many of these businesses have lost well in excess of a month’s revenue and cash flow,” Legge said. “And in some instances, they’re still being expected to make their rents. They just can’t do it.”
The Calgary Chamber of Commerce — along with Calgary Economic Development and 10 other local and national organizations — have formed a recovery task force aimed at getting businesses up and running as quickly as possible. Kiosks have been set up at different times in flood-affected business zones to handle questions from business owners and hear their concerns.
The task force will also host a full-day Business Recovery Expo will be held Wednesday, July 31 at the Telus Conven- tion Centre. Sessions will cover topics like the Alberta government’s funding programs for small businesses; banking and how businesses can work with their financial institutions to stay afloat; insurance claims; building and health inspections; the rights of tenants and landlords; mental health for business owners and employees; payroll and staffing during and after the floods, and more.
Businesses that have suffered uninsurable physical damage as a result of the floods are also eligible for funding under the Disaster Recovery Program.