Emergency loan puts brakes on hurricane's damage to bottom line.When Hurricane Frances This article is about the Atlantic hurricane of 2004; for other storms of the same name, see Hurricane Frances (disambiguation) Hurricane Frances was the sixth named storm, the fourth hurricane, and the third major hurricane of the 2004 Atlantic hurricane season. struck Florida on 2004's Labor Day Labor Day, holiday celebrated in the United States and Canada on the first Monday in September to honor the laborer. It was inaugurated by the Knights of Labor in 1882 and made a national holiday by the U.S. Congress in 1894. Weekend, David and Karen Eisen experienced the problems that can hit business owners when the lights go out--and stay out for eight days. The way this husband-wife team weathered the storm using a Small Business Administration emergency loan provides a lesson in how small businesses can recover from big and unexpected problems. Their Tilden Car Care store in Boynton Beach Boynton Beach, city (1990 pop. 46,194), Palm Beach co., SE Fla., on the Atlantic coast; inc. 1920. A major suburban area, it is also a beach resort and vegetable-shipping point. , Fla., suffered water damage and damage to several machines. Cleanup alone would have cost the company just several days' business with no serious disruption, David Eisen says. But the loss of electricity after Frances knocked down power lines delivered a severe jolt, resulting in lost revenue for Tilden Car Care and thousands of other South Florida businesses. "We were shut for eight days," David says The Right Reverend Richard David Say, KCVO, DD (4 October 1914 - 14 September 2006), former bishop of Rochester (1961-1988). He was often noted for his height (6ft 4in). Life He was the son of Commander Richard Say, RNVR. . "We had to pay employees. When the power came back on, people had to take care of their own lives and houses." Through the end of September, most regular Tilden customers brought in cars only for emergency work. "For a month, we did about one-third our normal business, and it was still slow in coming back through October," says David. Their store, a franchise of Tilden for Brakes Car Care Centers of West Hempstead West Hempstead, uninc. city (1990 pop. 17,689, including Lakeview), Nassau co., SE N.Y., on Long Island. It is chiefly residential. , N.Y., had been profitable since it opened in 1998. But after Frances, slow cash flow forced the Eisens to consider selling, closing or dipping into personal savings. Searching the Internet for help on what to do, they found the Small Business Development Center at Florida Atlantic University “FAU” redirects here. For other uses, see FAU (disambiguation). Florida Atlantic University, also referred to as FAU or Florida Atlantic, is a public, coeducational research university with its main campus in Boca Raton, Florida, United States. in Boca Raton Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla., and learned about the SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government Economic Injury Disaster Loan Program. The Boca Raton SBDC SBDC Small Business Development Center SBDC South Bucks District Council (UK) SBDC Small Business Development Company (Trinidad and Tobago) SBDC Simulation Based Design Center is part of a network of such centers nationwide partially funded by SBA. SBDCs offer a variety of programs for startups and small-business owners. In early October, the Eisens met with Phil Scruton, an SBDC business analyst. He told them their business was eligible for a disaster loan because it had suffered substantial economic injury and was in a declared disaster area. The SBA makes such loans only to businesses it determines are unable to obtain credit elsewhere. It can provide up to $1.5 million in disaster assistance to a business. Interest rates on the loans cannot exceed 4 percent, and lengths can be up to 30 years. Terms are based on a business's ability to repay the loan. "We get out in the community and spread the message about disaster loans," says Francisco Marrero, SBA South Florida District director. "The day after a hurricane hits, we hit the roads to talk with businesses, elected officials, chambers of commerce and faith groups to tell them about the program and how the SBDC can help," Marrero says. Because the Eisens were well-prepared with their paperwork, Scruton says, they needed less time than many hurricane victims to fill out an application. That package includes personal financial statements, three years of tax returns for the business, information on sales for three years and a report with details on where and how revenue was lost. Scruton also advised the Eisens on preparing the narrative at the beginning of their application. The Eisens sent their application to the SBA Disaster Recovery Office in Atlanta that November. Early in March 2005, the SBA approved their loan for $65,500. The 20-year fixed-rate loan Fixed-rate loan A loan whose rate is fixed for the life of the loan. has an annual interest rate of 2.9 percent. That disaster loan was one of nearly 52,000 made by the SBA in Florida after the 2004 storms. The Eisens used part of the proceeds to make payments they had delayed to parts suppliers and other vendors. The Eisens also used their SBA loan to replace machines damaged by Frances. They didn't file an insurance claim because the loss was less than the deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). on their insurance policy. That dilemma was common in Florida following 2004 and 2005 hurricanes, as insurance companies continued to raise premiums and deductibles. Because their business had rebounded, the Eisens did not need to spend all the loan money. "We put the rest in the bank as a reserve fund," says David, noting that hurricanes can hit any year in Florida and that costs of insurance and rent will undoubtedly keep rising. After Hurricane Wilma Hurricane Wilma was the most intense hurricane ever recorded in the Atlantic basin. Exceeding the 21 storms of the 1933 season, Wilma was the twenty-second storm (including the subtropical storm discovered in reanalysis), thirteenth hurricane, sixth major hurricane, and fourth hit South Florida last October, Tilden Car Care lost power for five days and suffered a downturn in volume for several weeks. Money from the "reserve fund" enabled them to keep paying bills, David says. The Eisens' store posted a loss in 2004, but regained profitability last year. Revenue last year rebounded to 2003 levels. David began running small businesses in 1980, when he bought the first of several gas stations in Nassau County Nassau County is the name of two counties in the United States of America:
In 1998, they opened Tilden's first franchise outside the New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. market. Tilden owns or has auto-repair franchise stores in 19 states. The Eisens are considering a second store and may turn to the SBA's primary lending source, its 7(a) loan program. TILDEN CAR CARE 12550 S. Military Trail, Boynton Beach, FL 33436 (561) 638-0944 www.tildencarcarefl.com Founded: 1998 Employees: 4 2005 revenue: Would not disclose. |
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