NEW YORK — The recent wildfires in California have taken a serious toll on countless small business operators and individuals who have lost their homes, businesses, or means of earning a livelihood.
Raquel “Rockey” Smeir launched My Friends Café in Sierra Madre, California, in 2021. Although her establishment was fortunate enough to escape damage, she faced challenges such as power outages, mandatory evacuations affecting staff and customers, and disruptions within the entire community. Upon returning to her café, she found herself grappling with significant lost revenue, spoiled inventory, and a community that was already reeling from the disaster.
“A lot of people may underestimate the intense financial pressure a small business like ours encounters during unexpected catastrophes,” Smeir commented. “With ongoing obligations such as payroll, rent, and taxes, the revenue loss and inventory wastage from being closed for nearly a week can lead to a financially crippling situation.”
In response to the crisis, fundraising efforts have rapidly increased through platforms such as GoFundMe, however, a range of support options are also offered at both national and local levels for the impacted small business community. Recently, a hold on federal loans and grants was announced, though it remains unclear whether it affects disaster-specific assistance. Small business owners can still apply for disaster aid via the Small Business Administration (SBA) website.
The SBA’s Economy Injury Disaster Loans typically assist with working capital needs arising from disasters, even when there is no physical impact noted. These loans can help with payments like fixed debts, payroll, accounts payable, and other necessary expenses that would have been covered had the disaster not interrupted operations. Businesses are eligible for loans up to $2 million.
Homeowners facing damage can access disaster loans of up to $500,000 for repairs or replacements of compromised real estate. Additionally, homeowners and renters can receive up to $100,000 for replacing or repairing damaged personal possessions, including vehicles.
On a more local scale, the Los Angeles Chamber of Commerce has established a fund aimed at assisting small businesses affected by the wildfires. This $1 million fund is designed to provide grants ranging from $5,000 to $10,000 directly to struggling businesses, along with offering webinars focused on disaster recovery and guidance on business strategies.
Community Development Financial Institutions, or CDFIs, also serve as valuable resources for small businesses, providing grants and loans typically at more favorable rates compared to traditional banks.
Smeir opted for this avenue; she has applied for an SBA loan and two grant programs but, as she anticipates responses by February or March, she has already received a grant from LiftFund, a CDFI based in San Antonio, Texas, to help restore her business to a functional state.
“It feels like starting a new business, but with the benefit of experience and lessons learned,” she remarked.
Industry-specific support is also available. Austin Manuel, who operates Healing Force of the Universe, a record shop and event venue in Pasadena, has yet to seek assistance as he battles wind damage and smoke infiltration. He has had to cancel numerous events and defer several music classes.
He plans to explore aid tailored for the music industry through organizations like MusiCares and Live Nation and is contemplating an SBA loan.
“We anticipate many of our future events will be fundraisers for the community,” he expressed. “We aim to provide as much support as we can for as long as we’re able.”
As small business owners evaluate which forms of assistance to pursue, it is critical for them to be wary of potential scams. Vulnerable individuals are often targeted by unscrupulous parties looking to take advantage of their situations. If an offer seems overly beneficial, it’s likely too good to be true; business owners should exercise caution when divulging personal information.
“Small businesses in these kinds of situations are frequently preyed upon by predatory lenders who capitalize on companies facing cash flow problems,” explained Carolina Martinez, CEO of CAMEO Network, a statewide organization dedicated to micro-businesses. She emphasized that business owners must remain vigilant and be clear about the terms of any offerings they consider.
Amid the struggle for recovery after devastating fires, small businesses can access multiple forms of assistance.
