Small businesses need to be a priority

Traditionally, disaster recovery models, such as Hurricane Maria, have focused on infrastructure and home restoration, among other things. This means that the issue of economic development is not necessarily given priority, especially in small and medium-sized businesses.

It was precisely when the Foundation, a nonprofit foundation with a mission to transform the island into a destination for the world, took to the streets to offer immediate help that our volunteers realized that the small businesses in the municipalities they visited were closed or virtually inoperative. In fact, when we sat down to talk to the owners of these businesses, many of them had no hope of reopening, while others juggled to survive. Naturally, we were very concerned about this situation, especially in important commercial areas for visitors and residents, so we began collecting data on ways we could help these companies reopen and expand their operations.

The most important federal aid resource for small businesses is the Small Business Administration (SBA), which provides low-interest loans. However, the merchants were not applying, many of them because of the uncertainty of not being able to repay them. According to a study conducted by SBA, of the 86,171 applications that FEMA distributed to small businesses, 68,394 were never filed and/or delivered.

As a result, we decided to create the’Small Business Cash Grant’, which allowed us to support small businesses through a cash grant that could be up to $5,000 per business. We also partnered with the Center for Entrepreneurs, a nonprofit organization that provides consulting and mentoring to small businesses, so that they could accompany them and provides them with the necessary business tools to continue growing their sales. To determine which businesses would benefit from this initiative, we identified key business districts in Puerto Rico, did not open up the application process to everyone, since by grouping the grants we supported the geographic area as a whole, rather than a single business in a particular location.

This element is important because one of the purposes of the programme was to reactivate these areas to serve as recovery centers for adjacent communities. We also split the business payment into two installments. Once the shop was selected, Foundation would hand over the first part of the check and three weeks later they would receive the second part, provided that they showed evidence of an increase in sales and employment compared to the initial visit. Likewise, business owners had to take four hours of technical assistance; this was very important to us, as many times business owners need advice on critical decisions they need to make to rebuild or save their operations.

Initially, this initiative, which we started in mid-October 2017, was implemented in limited areas to account for its results. To this end, the areas selected were Calle LoĆ­za in Santurce, the public square in Ponce and road #110 in Aguadilla. After seeing the success of the program, Foundation for Puerto Rico expanded it. In total, we have supported 200 small businesses in 11 municipalities with an investment of over half a million dollars.

Although we still continue to collect information on the progress of the businesses we help, we have come to preliminary conclusions about small business assistance in the aftermath of an emergency. Among them: Puerto Rico needs short-term financing alternatives that are available immediately after an emergency; it is important that technical advice and funding go hand in hand. This type of support allows funds to be invested correctly and businesses to be successful.

We are currently designing the next phase,’Small Business Support & Development Program’. In addition to grants and technical assistance, this phase will focus on educating small businesses on emergency preparedness and response plans, among other things. In this way, we integrate immediate relief efforts with a long-term recovery mentality, which ensures the economic development of our communities.

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