NEW YORK (AP) – The recent fires in California have significantly impacted small business owners and residents, many of whom lost their homes, businesses, or livelihoods to the flames. Raquel “Rockey” Smeir, who founded My Friends Café in Sierra Madre, California, in 2021, faced challenges even though her building remained intact. The mandatory evacuations led to power outages, compelling staff, customers, and the entire community to leave. Upon returning to her establishment, Smeir confronted lost revenue, spoiled food, and a community in distress.
According to Smeir, the financial strain on small businesses during such unexpected events is often underestimated. "With payroll, rent, and taxes due, the loss of inventory and revenue from being closed for nearly a week can be financially devastating," she stated. Although private fundraising efforts on platforms like GoFundMe are rising, various local and national aid programs are available for affected small business owners. A recent announcement on federal loans and grants put a freeze on new applications; however, it remains uncertain whether this freeze impacts disaster aid. Nonetheless, disaster aid applications are still being accepted through the Small Business Administration (SBA) website.
The SBA typically provides Economic Injury Disaster Loans to cover working capital needs from disasters, even without physical damage. These loans can help pay fixed debts, payroll, accounts payable, and other necessary expenses that business owners encounter during disasters, allowing for loans of up to $2 million. Homeowners are eligible for disaster loans up to $500,000 and can receive up to $100,000 for the repair or replacement of personal property, including vehicles.
On a local level, the Los Angeles Chamber of Commerce has established a $1 million fund to support small businesses adversely affected by the fires. Grants ranging from $5,000 to $10,000 are available to provide direct assistance to impacted small businesses. The initiative also includes disaster recovery webinars and business advising support.
Another resource for business assistance is Community Development Financial Institutions (CDFIs), which offer grants and loans at more favorable rates than traditional banks. Smeir opted for this route, applying for an SBA loan and two grant programs that she does not expect to hear back from until early 2024. However, she did receive a grant from LiftFund, a CDFI based in San Antonio, Texas, to aid in recovering her business. "It’s like reopening a new business, but this time with valuable experience and lessons learned," she reflected.
Specific industry-related aid is also available. Austin Manuel, owner of Healing Force of the Universe, a record store and event space in Pasadena, California, has yet to apply for assistance due to the wind damage he incurred, which allowed ash and smoke to infiltrate his establishment. He has canceled events and postponed music classes but intends to seek music industry-specific aid from organizations such as MusiCares and Live Nation, and he is contemplating an SBA loan as well. "We expect many of our upcoming events to be fundraisers for the community," he mentioned. "We hope to show up for them as best we can for as long as we can."
As small business owners evaluate their options for assistance, caution against scams remains critical. Vulnerable individuals are often targeted during crises, and if an offer seems too good to be true, it likely is. Business owners are advised to exercise care when sharing personal information. Carolina Martinez, CEO of CAMEO Network, emphasized the risks, stating, "Small businesses in situations like this are always targeted by predatory lending, those looking to exploit businesses with the type of cash flow or taking advantage of the situation." It's crucial for business owners to remain vigilant and thoroughly understand the terms of any assistance they consider.
