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Monday, February 18

Brookdale Newsroom

Businesses wade through loan and grant applications as rebuilding continues at the shore

By: Stacy Jones, The Star Ledger

The lingering Hurricane Sandy damage that nearly caused Michael Bienz and Sam Nativo Jr. to lose Mix, their 12-year-old Long Branch martini lounge, can’t be photographed.

A lagging shore economy has hit sales hard — closing businesses that otherwise survived the storm — and has left Nativo yearning for the days he battled tourists for parking.

The men had been planning a grand opening for 2nd Floor Restaurant, a sit-down eatery located above Mix, the same weekend the hurricane hit. When forecasts predicted widespread destruction, they decided to protect their investment by riding out the storm in the restaurant.

Second Floor opened just after Thanksgiving, but Bienz has been careful to keep an eye on the books for both establishments. Sales at Mix dropped after the storm and although 2nd Floor has done well, current conditions have made it hard for the new business to flourish.

“We reinvested so much of our money to create this,” Nativo said, sitting at the bar in 2nd Floor Restaurant. “So we had this intense fear of losing it because we didn’t have enough of a financial backup to handle something like the storm.”

They are among thousands of business owners waiting for a decision from the U.S. Small Business Administration on a disaster loan application. The program was created to help homeowners and business owners recover from the storm. But now pending SBA applications for low-interest money have become obstacles to grant money.

Last week the state launched the Stronger NJ Business Grant program, funded with $260 million from the $1.8 billion in aid the state received from the federal government. The New Jersey Economic Development Authority, which was charged with determining whether small businesses qualify for the grants of up to $50,000, said it has already received 524 applications.

Since the program only disburses funding of last resort, business owners must prove they have exhausted all other options, including SBA loans, before applying.

The May 1 deadline for SBA loans to cover physical damage costs just passed, but people who never applied may still be eligible for grant money, said EDA spokeswoman Erin Gold.

Businesses that did make the deadline for those loans will have to wait until the SBA makes a decision on their application before applying to the EDA program, she said.

Business owners should start filling out their grant paperwork now so that they can move quickly if the SBA denies their loan or approves them for an amount that falls short of their need, Gold said.

As of Wednesday, the SBA disaster loan program had received 5,985 applications from businesses affected by Sandy and issued 1,533 approvals totaling almost $150 milllion, according to Atlanta-based SBA spokeswoman Kathy Cook. Those approvals represent 19 percent of the $759 million that’s been lent through the program, which also serves homeowners.

A Star-Ledger analysis using detailed SBA data shows that nearly 6,500 New Jersey borrowers had received loan approvals by Feb. 13. Of those, 5 percent, or 343 applicants, were business owners.

To help businesses keep their heads above water until funding arrives, the state’s Small Business Development Centers network has been sending consultants and experts to help owners navigate paperwork and eligibility requirements.

Michael Schiavo, owner of The Peddler bike shop about a mile down Ocean Avenue from Mix and 2nd Floor, has been waiting on word regarding his loan application, too. He has been working with business consultant Lisa Kanda to make sure the business, founded in 1974 by his father, attract enough customers to increase sales.

Kanda, who also works with the owners of Mix and 2nd Floor, has been concentrating her effort on companies in Ocean and Monmouth counties, where an about 55,000 businesses were hurt by Sandy, according to the Division of Consumer Affairs.

“These businesses are important pieces of the fabric that makes this community. They want to stay here,” said Kanda, sitting in an upstairs break room at The Peddler. “I figure out where they were before Sandy and try to get them doing even better.”

Schiavo has been working around the clock to get his business back on track. Having Kanda oversee loan applications has been a blessing, he said.

“Trust me, it’s very painful,” she said. “It takes hours and hours to fill out the paperwork.”

In Long Branch alone, the Division of Consumer Affairs estimates 1,322 businesses took a hit during the hurricane. Jackeline Mejias-Fuertes, director of the Small Business Development Center at Brookdale Community College, said the SBDC has received  a grant money to send experts to visit people like Schiavo who don’t have time to spare for off-site workshops or meetings.

“We could have any kind of workshop we wanted,” she said, “but if it’s not what the business owners need and it’s not convenient for them, then it doesn’t make sense.”

Another aspect of the SBDC program has been prodding the companies to file for disaster aid, even if it sometimes means waiting for SBA loans while grant money sits on the table.

“I screamed and yelled and jumped up and down saying fill out this paperwork to every business I met with,” said Kanda. “We’re not abandoning anyone.”