Rebuilding Businesses Post-Sandy
In October of 2012, much of New York resembled the aftermath of a scene from a big budget action movie. This was chaos on a grand scale: Cars flipped, trees uprooted, utility poles snapped like toothpicks and entire homes swept away. But this wasn’t a movie; it was real. Superstorm Sandy, the largest Atlantic hurricane on record, had battered the city, claiming 53 lives and causing an estimated $18 billion in damages.
Darcy Flanders was among those caught up in the devastation. “I have two very large pine trees in my front yard, and they fell onto the front of my house,” she said. “It was terrifying.”
It wasn’t just homes that were destroyed by the storm; many lost their livelihoods. More than 23,000 New York City businesses employing 245,000 people were impacted by Hurricane Sandy. Among those hit hardest were small businesses with less than 50 employees: FEMA estimates that around 40% of these were unable to rebuild post-disaster.
Darcy, the owner of Baseline Group NY, a design and branding firm, was among those struggling to recover. “Our office was in the blackout zone so we had no power for a week, but it took much longer than that to get back to normal. Our server shut down so we couldn’t access files and our phone system went back to factory settings. Sandy disrupted everything,” she said.
Darcy’s business was out of action for three weeks in total. During that time the company didn’t earn anything, but the expenses didn’t stop: There was still rent, and people, to pay. Things got so tight that Darcy was forced to use her own savings to stay afloat. “I couldn’t just not pay my staff,” she said. “It’s not like they were on vacation. So I had no choice but to pay people out of my personal retirement account.”
It was a cruel blow, crueler still when you hear Baseline’s backstory. “When we first started out, most of our clients were financial service-related. So, when the market crashed in 2008, they stopped outsourcing. We lost 75% of our business altogether,” she said.
In the aftermath of the global financial crisis and the ensuing recession, Darcy fought to reestablish her firm and build a new client base. Just when she thought she had succeeded, Sandy struck. The pain was almost too much to bear: “I would say that, of anything that’s ever happened in my 17 years of business, that was probably the lowest point,” she said. “I wasn’t sure whether I had the inner strength to rebuild the company again. I was really contemplating bankruptcy and ready to give up at the time.”
Darcy knew that she would only be able to save her company if she took out a loan. But in an economic environment where banks are subject to increased regulatory scrutiny, it can be hard for a business to find a lender. “I couldn’t get money from anybody,” she said. “It was really hard to find anyone willing to buy into the fact that I was going to be a good person to give money to because my business had taken such a hit.”
Rejected by traditional lending sources, Darcy began to seek other options. That’s when Renaissance Economic Development Corporation came into the picture. “Renaissance was the only financial provider that even entertained working with me. It made me believe that there were people out there who looked at things other than just the pure number ratios. You asked questions that had to do with my ability to build my business, and you looked at things like how much progress I had made recently. Nobody else took any of that into consideration,” she said.
Darcy has received two loan products from Renaissance to date: A hurricane Sandy emergency loan and a post-Sandy recovery loan. Since then, her business has gone from strength to strength. “The first year we doubled our revenues and had 75% growth. We won’t continue to grow at that rate, but this year we’re hoping to at least experience 25% growth,” she said.
When asked to summarize what Renaissance did for her, Darcy’s response is hyperbolic, but reveals much about how difficult it is for small businesses to find loans these days. “You saved my life,” she said. “You gave me what I needed, when I needed it most.”