The Oklahoman

Small businesses face slow, difficult recovery after Ida

Some areas could be without power for weeks

- Mae Anderson

NEW WORK – Small businesses hit by Hurricane Ida face a slow and daunting recovery as they grapple with storm damage, a lack of power, water and internet service and limited ability to communicat­e with clients or customers.

It’s another blow for business owners who have been coping with the disruption caused by the coronaviru­s pandemic for over a year.

“Our fear is many businesses aren’t going to be able to recover, given everything else they’ve gone through for the past 18 months,” said David Chase, vice president of outreach for the advocacy

group Small Business Majority.

More than 1 million homes and businesses in Louisiana and Mississipp­i were left without power as Ida pushed through Sunday into early Monday. Officials said some areas could be without power for weeks.

Experts say there are several ways for businesses to begin to recover from a disaster. Consider low-interest natural disaster loans from the government and insurance claims.

“It’s a big storm, slow moving, and hitting a number of states,” said Todd McCracken, president of National Small Business Associatio­n. “The higher the number of claims, the slower response is going to be.”

For Bill Rau, the owner of M.S. Rau, an antiques business on Royal Street in the French Quarter in New Orleans, the biggest obstacle isn’t damage to the physical location. It’s that without power and water, no one can tenably live in the city. He said most of his 62 employees have evacuated.

During Katrina, Rau dealt with as many as 14 insurance adjusters. But he hasn’t even begun to consider if he will apply for disaster relief this time.

While efforts to assess the damage are just underway, an early estimate from Fitch Ratings says Ida will cost insurance companies $15 billion to $25 billion. That’s well below the record $65 billion of insured losses from Hurricane Katrina in 2005. But Ida will likely surpass the winter storm dubbed Uri that hit in February as the costliest storm in 2021.

Power and internet are lifelines for small businesses, said David Lewis, CEO of HR services firm Operations Inc. Ideally, businesses had a hurricane plan in place and sent out emails in advance, letting customers know how to reach the company if power is lost.

Businesses that didn’t forewarn customers should reach out by forwarding a company phone to a cell phone, or using a mobile phone as a hot spot for an internet connection. While they have had some problems with their mobile networks, Verizon, AT&T and T-Mobile all said they would offer customers in affected areas free talk, text and data throughout the week.

“If you are able to have connectivi­ty, you’re often able to provide some level of continuity for clients,” Lewis said.

Business owners also should closely review their insurance policies to know what is covered. In the aftermath of Superstorm Sandy, it became apparent that some insurers covered storm damage but not wind damage. Alternativ­ely, owners might be covered for some things they didn’t realize.

Alex Contreras, director of preparedne­ss, communicat­ion, and coordinati­on for the U.S. Small Business Administra­tion’s Office of Disaster Assistance, said the areas hit by Hurricane Ida were declared disaster zones, so businesses of all sizes can apply for physical disaster loans as well as working capital loans. The maximum amount is $2 million for both types of loans combined. The interest rate is about 2.9% and the money can be repaid over 30 years.

Chase, of the Small Business Majority, also recommends that businesses look into Community Developmen­t Financial Institutio­ns funds. They focus on offering loans to underserve­d communitie­s that big banks might reject. The loans are low interest, but also low dollar amounts.

“A lot of small businesses may only need $20,000 or $50,000,” Chase said. “CDFIs may be an option if they’re not getting a loan from a big bank, or having trouble getting loans from SBA.”

 ?? STEVE HELBER/AP ?? While efforts to assess damage are just underway, an early estimate from Fitch Ratings says Hurricane Ida will cost insurance companies $15 billion to $25 billion.
STEVE HELBER/AP While efforts to assess damage are just underway, an early estimate from Fitch Ratings says Hurricane Ida will cost insurance companies $15 billion to $25 billion.

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