Funds Launched to Aid the Gulf’s Independent Businesses

Date: 11 Oct 2005 | posted in: Retail | 0 Facebooktwitterredditmail

Local business owners across the country are coming to the aid of their counterparts in the Gulf Coast by establishing funds to provide direct assistance to independent businesses affected by the hurricanes.

One fund has been set up by Small Business California, in partnership with several statewide and local small business groups. Working through the Louisiana Business & Industry Association and the Baton Rouge Area Foundation, the fund is providing grants to small businesses affected by the disaster.

Examples of those who have been helped thus far include an automotive repair shop with three employees that received a $5,000 grant to cover payroll and make building repairs. Another is a retail store in the French Quarter that was not damaged, but has lost 90 percent of its businesses.

Small Business California will match your donation 25 cents on the dollar.

In addition, the American Booksellers Association, which represents the nation’s 3,000 independent bookstores, has set up a permanent fund, the Bookseller Relief Fund, that will provide help to booksellers affected by natural disasters and other emergencies. The ABA seeded the fund with $25,000 and has been receiving donations from booksellers, publishers, industry groups, and individuals.

The fund provides two phases of relief. Under the first phase, any owner or employee of an independent bookstore located in a federal disaster zone is eligible for an immediate cash grant of $500. Under the second phase, booksellers may apply for more substantial financial assistance based on a letter outlining their needs. The ABA is also offering affected businesses free legal advice.

A number of bookstores in New Orleans and in smaller towns along the coast were destroyed or severely damaged by the hurricanes. Bookends Bookstore in Bay Saint Louis, Mississippi, was reduced to nothing but a foundation. Owner Susan Daigre initially thought she would not rebuild, but has since changed her mind. “This town has been really good to me, and it’s a very tight community,” she told Bookselling This Week. “And, damn it, this community needs a bookstore.”

Meanwhile, the federal government’s recovery efforts have largely bypassed small businesses. An analysis by the Washington Post of the first wave of federal contracts for recovery and reconstruction found that 90 percent were going to firms outside of Louisiana, Mississippi, and Alabama.

As the Post reported: “The lack of contracts for firms in the devastated area has angered local political and business leaders who say they fear that even with the massive commitment of federal money, the region’s recovery will be stymied if funds primarily flow into the pockets of large, out-of-state corporations. It has also raised the ire of small-business advocates, who say the government has tilted the playing field against the companies that most desperately need the work.”

Senator Olympia Snowe and Congressman Donald Manzullo have requested that the General Accounting Office investigate whether small businesses have been given adequate opportunity to compete for federal recovery and reconstruction contracts.

Nor are small businesses receiving the financial aid that is so critical to their ability to survive the immediate aftermath of the disaster. As of the end of September, a month after Katrina struck, the U.S. Small Business Administration had not mailed a single loan check to businesses in the disaster zone. More than 26,000 businesses affected by the hurricane have applied for SBA loans. Unlike large companies, these businesses generally have little in the way of reserve funds to fall back on and, without transitional assistance, are likely to disappear.


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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.