Last week the City of Columbia announced that it had awarded five small businesses no-interest loans to help them recover from the flood last fall. Each of the businesses received $10,000 to help with their recovery. The loans must be repaid within two year and can be used for any flood-related loss.
At the recent Charleston symposium hosted by the Charleston Resilience Network, I served on a panel to tlk about the business and economic impacts from last year’s floods. On the panel with me was Tracy Harbour of the U.S. Small Business Administration. She said that through February 23rd the SBA made 482 flood-recovery low-interest (4%) loans to businesses statewide and 58 of those were in the Charleston area. These loans included economic injury loans for businesses just for working capital. Thirty-four of these latter loans were made statewide but only 4 in Charleston.
There is no doubt that South Carolina businesses lost a great deal of revenue from the depressed demand resulting from the floods in addition to those sustaining physical losses. So the question the EPA asked was why so relatively few small businesses requested flood recovery loans (there are no grants from the SBA for flood related losses to businesses).
Lack of knowledge of the availability of the SBA loans including those for economic injury certainly could be part of the answer. But as I stated at the symposium, small businesses would rather not take out a loan that they have to pay back with interest, even only 4% interest. The majority who were harmed would rather struggle the best they can to avoid going into unnecessary debt.
That’s why the City of Columbia’s no-interest small business flood recovery loans are so beneficial. $10,000 might not sound like a lot of money, but it can be the difference between a small business staying in business and one folding or going into unnecessary debt.
Congratulations City of Columbia.