By Deborah Cohen
CHICAGO Nov 6 When Superstorm Sandy immobilized
companies throughout the Northeast last week, entrepreneur David
Greenberg scrambled to shift work in the New York-area to a
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
"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
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
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
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.