Flood victims need grants, not loans
Posted: Thursday, June 26, 2008 6:40 PM by Eve Tahmincioglu
Filed Under:
Financing, Back office, Entrepreneurship
Terry Poe Buschkamp figured her town of Waterloo, Iowa, was safe.
The executive director of the
Main Street program in downtown Waterloo figured since the water rose to 25.39 feet on June 11 the town would not be flooded given the 27-foot flood wall.
Alas, the water came up from the sewers.
The majority of the 200 downtown businesses sustained water damage, and many lost inventory when the power went out, but the biggest damage has come from the lack of people coming to shop and eat downtown, she says.
FEMA and the SBA have been on hand, and the immediate talk was about how businesses can apply for low-interest loans.
It’s a nice gesture, says Buschkamp, “but for most businesses working on minimal margins and already leveraged they don’t need another loan on top of loans. They need grants.”
There may be some hope. The Iowa Department of Economic Development will be calling a special session to consider some sort of new grant program for small firms, she says.
I don’t want to knock the SBA loan program. There are indeed lots of businesses that will use the money, and for them it will be a lifeline.
After Hurricane Katrina, I wrote a story for the New York Times about damage to small businesses, and 14,000 firms had called the SBA inquiring about the loans within weeks after the storm hit.
Unfortunately, piling on debt in this economy might not be the right move for many firms.
The business owners of Waterloo need financial help, but they aren’t sitting around waiting, says Buschkamp. They are already doing what they can to keep their heads above water financially.
She thinks most businesses will reopen, but as for the smaller, marginal ones, she says, "I don’t know."
But she has hope given the determination she’s seen among the small business owners in her town.
“We have a little bead store that was one of the harder hit with no power and flooding on the first floor,” she explains. “They’ve been without power since the previous Friday, so her husband took the battery from the outboard motor on his boat and hooked it up to the cash register. They only made $30, but they’re still in business.”
You just can’t keep a good entrepreneur down.
