(Reuters) - When Superstorm Sandy immobilized companies throughout the Northeast last week, entrepreneur David Greenberg scrambled to shift work in the New York-area to a virtual office.
The owner of Miami-based Parliament Tutors, which does a brisk in-home tutoring business in New York and New Jersey for standardized tests such as the SAT and MCAT, redirected his tutors and students to cafes and other WiFi-enabled spots where they communicated over Skype.
"We had to find a solution, or we were going to take a very serious hit," said Greenberg, whose fledgling staff was able to minimize cancellations. "We were able to recoup a lot."
Many businesses weren't so lucky.
As the storm wreaked havoc and caused billions in damages along the Eastern Seaboard and beyond, companies large and small now are scrambling to pare their losses. Small businesses - most lacking risk-management departments along with staff to handle insurance claims or secure financing for rebuilding - are having a tough time. Owners say they are juggling the restoration of business services with attempts to obtain much needed capital.
"At least 40 to 45 percent of our customers in these areas have asked for disaster loans," said Rohit Arora, the CEO of Biz2Credit.com, a New York-based online service that helps small businesses secure various forms of financing. "Over the next two weeks, I foresee a bigger increase."
STEPPED-UP FINANCIAL EFFORTS
Commercial banks are reaching out with similar assistance.
Among the efforts at JPMorgan Chase & Co, which has a lot of customers in the Northeast, was a pledge of up to $5 billion in incremental capital for lending to small to mid-sized companies affected by the hurricane.
"We've put in place an expedited process so that clients can call, and we will review their case in a very short period of time - sometimes right on the phone," said Scott Geller, chief executive officer of Chase Business Banking.
Since the storm hit, Chase bankers have placed calls to more than 43,000 business banking customers in New York, New Jersey and Connecticut.
"People are starting to catch wind of what is out there and available," he said, adding that Chase had seen a pickup in requests for revolving credit lines and term loans to be used for rebuilding and related purposes. "We'll expedite the requests."
Goldman Sachs is working in conjunction with New York City to provide additional loans for storm-affected small businesses. The investment bank is offering $5 million to match the city's lending program, on top of a $5 million Goldman donation for storm relief efforts.
Ranging from $5,000 to $25,000, the loans are targeted at businesses in the city's five boroughs affected by flooding and power outages during the storm, said Cristina Shapiro, a vice president in Goldman's Urban Investment Group. They will carry a 1 percent interest rate over a 30-month term, with payments beginning in the seventh month,
"We felt by partnering with the city we could reach more businesses effectively without replicating or duplicating efforts," said Shapiro, who notes the program could assist at least 400 businesses.
GOVERNMENT REQUESTS RISING
The federal government, too, is amping up efforts to handle the magnitude of requests for recovery-related financing.
The U.S. Small Business Administration, whose offerings include disaster-relief loans, added 100 additional staff to its customer call center in Buffalo, New York, and another 128 field workers to assist with the onslaught of inquiries, said Carol Chastang, an SBA spokeswoman.
Through Sunday evening, the organization had issued more than 26,000 small business loan applications from companies affected by the storm in New York, New Jersey and Connecticut, she said. Chastang said the SBA was also opening additional business recovery centers throughout the affected areas.
Among the loans offered by the administration are funds for businesses that suffered physical damage and those with losses from a slowdown in business. Terms vary but each carries an interest rate of 4 percent, Chastang said.
Private industry groups, such as the Washington-based U.S. Chamber of Commerce, are helping to get the word out to small businesses about available resources. The U.S. Chamber's help desk (here) had coordinated with almost 650 small businesses and local chambers of commerce through midday on Tuesday, according to spokeswoman Bailey Gilchrist.
The Chamber is tracking relief efforts from major corporations, which in aggregate totaled $77 million through the same time period, Gilchrist said.
FRANCHISES GET HELP
Some small companies that are part of a larger enterprise, such as franchised retail outlets and restaurants, are getting help from their parent companies, whose own fortunes are affected by storm-related losses experienced by franchisees.
"My CFO is working around the clock," said Eric Casaburi, a Colts Neck, New Jersey, franchiser of two chains with more than 100 stores operating predominantly in the affected states: Retro Fitness gyms and Let's YO! frozen yogurt outlets.
Casaburi said his company is assisting franchisees - many affected by power outages and flood damage - with calls on insurance and Federal Emergency Management Agency (FEMA) claims and related assistance.
Some independent companies that survived the storm are simply acknowledging that they're going to have to wrestle with a big financial hit.
"Basically, I have to write it off as a loss," said John Schapiro, the CEO of New York City-based Windsor Resources, a staffing firm whose corporate customers and the temporary workers assisting them are primarily located in the tri-state area.
Schapiro said his Manhattan-based business shut down for about a week, as power to his office building was lost, along with an estimated $200,000 in gross billings.
"We can't bill for services not performed," he said.
(The writer is a Reuters contributor. The opinions expressed are her own.)
(Follow us @ReutersMoney or here Editing by Lauren Young and Jan Paschal)
Related
Before You Go
