admin Posted November 1, 2018 Share Posted November 1, 2018 PANAMA CITY — The importance of housing for small-business owners was made clear by Hurricane Michael with many distracted for the past three weeks by concerns about where they were going to live or how they were going to repair their damaged homes. “It’s quite eye-opening to actually experience this. It’s almost like being in a war zone,” said Ben Carson, U.S. secretary of Housing and Urban Development, who arrived in Panama City on Wednesday to survey damage and tour small businesses with Small Business Administration administrator Linda McMahon. “You almost have to think of it the same way in terms of recovery,” Carson said. He said the recovery would require a coordinated effort among state, local and federal agencies. While some citizens expressed frustration over the process of applying for assistance, Carson applauded the effort. “It’s never as fast as we would like it to be, but I think the response has been tremendous,” he said. The U.S. Department of Housing and Urban Development has issued a 90-day moratorium on foreclosures of Federal Housing Administration-insured home mortgages. Borrowers who need to make expensive repairs to an existing home or purchase a new home because of storm damage can apply for so-called Section 203(h) mortgages that require no down payment. Disaster-related loans from the Small Business Administration also are available not just for eligible small businesses, but for nonprofits and homeowners who need temporary funding while they await checks from property insurers. The Small Business Administration is set up for lending, and it is providing disaster assistance loans at below-market rates — for those who qualify. Carson and McMahon visited Boyette & Casey Hardware, 2134 E. Third St., which has applied for an SBA disaster loan. But the business recently was sold to a roofing company that does not plan to continue the hardware business, said owner Lee Casey, who took over the store from his father years ago. He said the hardware store’s sales have dropped about 30 percent in recent years because of online retailers. “We were barely getting by,” he said, explaining why he sold the business. The hurricane actually helped his sales. People stocked up on supplies before the storm hit. But Casey said he was concerned about the amount of damage the hurricane caused in the area around the store. “I’d like to say this community is resilient enough to hang with it, but they’re going to need some help.” Across the street, Cliff Armstrong said revenue from his upholstery business will be down because of the hurricane, which tore most of the tin roof off his building. “I just got that back together,” he said, adding that people aren’t thinking of reupholstery yet. “After the hurricane, it’s just like a cold stop. It’s going to be slow for a while.” Asked whether he would consider applying for a small business loan, Armstrong said, “No, I’m going to pass on the loan.” He hopes his business will pick up again. “I was doing real good until the storm,” he said. Richard McGee, a carpenter who also owns PCFireworksPlus.com, said he and his family moved into a trailer on land he used for his side business selling fireworks because his home was demolished. He doesn’t know if or when his home will be repaired. But with a wife who earns a paycheck and with steady income from his work as a subcontractor, he’s counting his blessings. “We’re blessed compared to some people. We have good friends we stayed with until just last night.” Many business owners and citizens don’t carry property insurance on their homes because of the cost or age and condition of the building. Without an insurance check on the way, they might not qualify for an SBA disaster loan for physical damage. Business owners like Teegee McCarthy, owner of Panama City Barber Shop, said she doesn’t want to apply for a small business loan because she doesn’t want to owe money. With the shop closed for about three weeks, she lost revenue. “If you’re not standing behind that chair cutting hair, you’re not making a dollar,” she said. Don Walton, general manager of the nonprofit St. Andrew Bay Yacht Club, said he was applying for an SBA disaster-assistance loan, which carries a low 2.5 percent interest rate. “We lost about 30 boats altogether. Our docks were completely wiped out,” he said. The yacht club building also was damaged but is insured, he said. The docks were not. “We’ll be open the first of December just because we have a lot of yacht club traditions that need to be fulfilled,” he said. But many other Panama City residents won’t be spending the holidays in a yacht club. They need housing immediately. “I just need to find affordable housing for people. We’re pulling out all the stops and thinking outside the box,” said Michael Johnson, director of community development for Panama City and administrator for the State Housing Initiative Partnership for the city and county. State funds are available for low- and moderate-income residents who intend to stay in Bay County and need money to make repairs to their home or to purchase a new modest home, Johnson said. “We have not received any disaster recovery dollars from HUD yet,” he said. The city of Panama City has money available to help citizens with up to $5,000 in relocation assistance, Johnson said. “These are state dollars we received. We receive an annual allocation from the state to help address the affordable housing.” For renters, the $5,000 can be used for a security deposit, first month’s rent, and utilities. “It has to be a place they can afford,” Johnson said. “If $1,000 is your gross income, rent shouldn’t be more than $300 a month. Right now, with everything being so high, that’s hard to accomplish.” To assist with a home purchase, up to $18,000 is available for a down payment and closing costs through a non-interest bearing loan, Johnson said. Funds also can be used to pay property insurance deductibles for people who qualify based on their annual income. Any resident who has disaster-related damage to their property should start by registering with FEMA at DisasterAssistance.gov. Then they also can apply for an SBA loan. FEMA has grants of up to $35,000 available for people with disaster-related damage, but the average is about $3,000 to $5,000, FEMA spokeswoman Lauren Lefebvre said. FEMA funds also can be used for transitional living expenses, but some small-business owners said they were turned away. By applying for an SBA loan, homeowners could be eligible for up to $200,000 to repair or replace their residence at a below-market fixed rate and another $40,000 loan for personal property damaged in the hurricane. Most people won’t be eligible for the full amount, said Laurie Dana, public affairs specialist at the SBA’s Office of Disaster Assistance. But she encouraged people to apply for a disaster loan even if they decide not to take the funds. “Even if they have insurance, they should complete a disaster loan as soon as possible. If they wait until the deadline (is passed), it’s too late,” she said. SBA filing deadlines are Dec. 10 for physical property loans and July 11, 2019, for economic injury loans. The FEMA/SBA Disaster Center for Bay County is at the Bay County Public Library, 898 11th St. in Panama City, but business disaster centers are open in the counties affected by Hurricane Michael, said Michael Myhre, interim state director of the Florida Small Business Development Center Network. Visit FloridaSBDC.org for more information. For eligibility, the SBA considers the dollar amount of the loss and any insurance or other forms of recovery. It also considers the credit-worthiness of the applicant. Small businesses could be eligible for up to $2 million in 30-year fixed loans for physical damage or economic injury because of the hurricane. Rates vary by individual case, but could be as low as 3.675 percent for businesses and 2.5 percent for nonprofits. The economic injury loans are working capital designed to help companies keep their doors open. SBA loan applicants are asked to provide their tax returns and list any debts owed along with their net profit and available assets. More information is available at disasterloan.sba.gov/ela or by calling 800-659-2955. Allow up to four weeks for a decision on SBA applications. In the meantime, business owners can apply for up to $50,000 in emergency bridge loans at 0 percent interest from the Florida Department of Economic Opportunity. These loans can be repaid by SBA loan funds. The application deadline for these one-year bridge loans is Dec. 7. Quote Link to comment Share on other sites More sharing options...
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