Jardine: Cavalry moseying to rescue burned Modesto businesses

Last month, Gov. Schwarzenegger implored the U.S. Small Business Administration to declare Stanislaus and eight other counties disaster areas.

The move makes some businesses in those counties eligible to receive up to $2 million in what the agency calls economic injury disaster loans.

On paper, the gov and the SBA might seem like the cavalry coming to the rescue.

In reality ... it looks better on paper.

The fire occurred Aug. 2. The SBA made its disaster declaration Oct. 22 -- nearly three months after the blaze destroyed the offices of 18 businesses at 1050 Carpenter Road in Modesto. That's hardly what you'd call a rapid response.

"The SBA set up shop in American Samoa just a couple of days after the tidal wave and it takes them three months to get to Modesto?" said Darren Babby, controller for M-P Management, which owns the building and expects to rebuild within a year.

In all fairness, the agency acted just three days after the governor's request, so perhaps he deserves the heat for waiting so long to ask.

Regardless, "by the time (SBA loan seekers) get done, we'll probably be rebuilt," said Babby.

Opening the loan program to businesses in the eight contiguous counties is a procedural thing. If a business located here or in an adjoining county does business with one of those burned-out firms, and can prove its income suffered because of the fire, it might qualify for a disaster loan, said Olivia Humilde, an SBA communications specialist in Sacramento.

"If they have business partnerships in neighboring counties, it may have an economic impact," she said.

Fair enough. The loan program, in essence, can sub for so-called business interruption insurance most small businesses don't carry because of the cost, Humilde said. SBA disaster loans are granted on need and can be used only for operational costs such as leased equipment, salaries, etc., but not for rebuilding costs. The interest rate is 4 percent for 30 years. Businesses have until July 21 to apply. She said the average processing time is 14 days, from submitting the application to getting a check in hand.

Some burned-out business owners will take whatever help they can get whenever they can get it, assuming they qualify.

"Months down the road helps," said Karin Love, owner of Love's Driving School. "We still have expenses from the fire."

But Karen DeVaney, owner of burned-out DeVaney Business Services, contends the government -- the state, feds or both -- took too long to respond.

"We needed it immediately, right after the fire," she said. "And they want you to tap out every other resource (before granting the loan)."

She provides tax and bookkeeping services, along with helping businesses apply to benefit from enterprise zones. The fire claimed her files, computers, office equipment and virtually everything else she needed to do business.

Her help came from some generous souls. "I'm back in business only because of my competitors, friends and other businesses," she said. "They put me back in business."

They gave or loaned her office furnishings, equipment and supplies. Others sold her equipment at substantial discounts. By Aug. 5 -- three days after the fire -- she'd found new digs on Blue Gum Avenue and was back in business.

DeVaney couldn't wait for the cavalry's help, no matter how good it might look on paper. "In reality, it's too late."

Jeff Jardine's column appears Sundays, Tuesdays and Thursdays in Local News. He can be reached at jjardine@modbee. com or 578-2383.