February 7, 2013
Letter to Secretary Shaun Donovan on Sandy Relief for Small Businesses
February 7, 2013
The Honorable Shaun Donovan
U.S. Department of Housing and Urban Development
451 7th Street S.W.
Washington, DC 20410
Dear Secretary Donovan:
It was nice meeting with you at the post Hurricane Sandy event with Nassau County Executive Ed Mangano and Suffolk County Executive Steve Bellone. As our region recovers from the devastation caused by Sandy, it is imperative that while we make the necessary investments in our infrastructure, we must also address the needs of the small business community. While we have been advised the Sandy aid package that was signed into law by President Obama does not explicitly state that grants be made available to small businesses. However, we have also been advised that there may be some flexibility in the Community Development Block Grant funding that would allow for such assistance. As you and other federal officials draft the rules and procedures for the allocation and expenditures of the Sandy recovery monies, I respectfully request that you ensure that some funding is set aside for grants for small businesses, similar to how homeowners can access grants through FEMA.
The Long Island economy is made up of more than 100,000 businesses and 90% of those businesses employ 20 people or fewer. Thus, small businesses are clearly the backbone of the Long Island economy. Hurricane Sandy led to tens of thousands of small businesses losing power for weeks, which resulted in lost sales and many small businesses were flooded and damaged beyond a simple repair. Small businesses that were already struggling in this slow and bumpy economic recovery now question whether they can still survive and remain open for business.
Many stores, restaurants and small businesses throughout Long Island were damaged and some even destroyed. However, almost all the federal money that has been available to small businesses thus far is in the form of loans. While loans can be helpful, after this storm and in this economy small business owners are resistant to taking on more debt. Most of the money lost by small businesses can never be recovered. If you are a homeowner, you may be eligible for a grant from FEMA. But if you are a business owner, your only federal option is an SBA loan. This has to change because those that do not get back to business fast may find themselves unable to ever open again.
Small businesses, often living week to week, have fewer reserves and are more dependent on daily cash flow and thus rebuilding on loans alone is problematic. We must also recognize that businesses that may not have suffered physical damage from Hurricane Sandy but rather extraordinary losses of revenue due to power failures and missing customers. Many small retail businesses and restaurants made no revenue in the weeks after the storm because so many other people were unable to travel to or actually work at their offices. As you dole out the storm recovery funding, it should have some flexibility to adequately respond to small businesses who may never recover their substantial numbers of lost sales.
We have been championing this issue ever since Hurricane Sandy hit our region. I made this request to the Administrator of the SBA, Karen Gordon Mills, when we hosted a forum with her for our business community and I also testified on this to the United States Senate before the Small Business Committee. However, it is worth repeating again and again: it is simply critical that the CDBG funds being made available include grant assistance to small businesses.
Kevin S. Law
President & CEO
Long Island Association
cc: Senator Charles Schumer
Senator Kirsten Gillibrand
Long Island Congressional Delegation
Governor Andrew Cuomo
Nassau County Executive Ed Mangano
Suffolk County Executive Steve Bellone