Sandy’s Victims Don’t Want Business Loans

Sandy superstorm flood damaged building
Over 100 business owners gathered in Brooklyn, N.Y. to express their anger at New York City officials. The owners were angered by city officials offering business loans to them in the wake of their completely destroyed inventories and facilities in the wake of Super-storm Sandy.

The Small Business Administration offers low-interest disaster business loans, which carry a maximum interest rate of 4 percent. On top of that, New York City offers bridge loans of up to $10,000. While these offerings are surely well-intentioned, they have only served to anger business owners.

“Most of us are deeply overextended as it is. We’re all shut down. We have staff we can’t pay. We really need some support that’s not about loans,” said local restaurant co-owner Monica Byrne, according to CNN.

While business loans offer a cash infusion to struggling businesses, they do have the unfortunate attribute of requiring repayment. Taking on debt that must be repaid when their businesses may still be literally underwater is a prospect many business owners simply reject.

“Money. We need money,” said Mike Ikhmies, a printing firm owner.

Shockingly, these business owners did not have the insurance that would make borrowing money unnecessary.

“No one in this room has flood insurance,” said Jackie Summers, a local business owner.

Those that tried to get flood insurance found that their location near the waterfront was a costly hindrance.

“They only went up to half a million. The equipment cost $4 million, $5 million. What good would half a million do if things got damaged?” asked Ikhmies.

Sandy’s economic damage is estimated to be $50 billion. According to CNN, risk analysis company Eqecat estimates that only $10 to $20 billion will be covered by insurance policies. The remaining potential $30 billion is likely to result in the closure of many businesses—with or without the availability of business loans.

“I want to be positive about this, but the whole thing is tragic,” said Summers.