Lori Gildemeister was looking forward to another busy tourist season until a flash flood washed away her profits along with her confidence that her once successful grocery store will remain viable.
Gildemeister, co-owner of Bragg Creek Family Foods, said her sales are down significantly since the June 20 flood damaged her store and devastated the business community in Bragg Creek.
Gildemeister said she had business interruption insurance but her policy was void because the damage to her store was caused by overland flooding.
Due to water damage, she had to repair her store’s floor and walls, and replace lost inventory.
In the aftermath of the flood, tourism revenue is down in Bragg Creek and so are Gildemeister’s sales.
Now she said she may have to access a provincially backed loan that will be difficult to repay.
“I am down $70,000 in sales and the disaster relief funding doesn’t cover those losses,” she said. “I will need a $100,000 loan to pay for all the expenses that the flood caused and to keep my doors open.”
Gildemeister was one of 21 local small business owners who attended a Bragg Creek & area Chamber of Commerce meeting at the Country Wood Conference Centre in Bragg Creek on Thursday Aug. 1.
Business owners were there to ask questions and receive information from Kyle Fawcett, associate minister of recovery and reconstruction for southwest Alberta, who attended the Q & A session to discuss the province’s Disaster Recovery Program (DRP) and their new Hand-Up Plan.
Announced on July 23, the Province’s Hand-Up Plan provides financial aid to flood affected small businesses through two new loan and interest rebate programs, the Alberta Flood Recovery Loan Guarantee Program and the Alberta Flood Recovery Interest Rebate Program.
The Alberta Flood Recovery Loan Guarantee Program provides low-interest loans up to $1 million, which are 75 per cent guaranteed by the Province, and offered through financial institutions and the Agriculture Financial Services Corporation.
The Alberta Flood Recovery Interest Rebate Program provides rebates of four per cent interest to people who participate in the Alberta Flood Recovery Loan Guarantee Program.
According to Fawcett, small business owners will encounter delays in receiving DRP funding because the Province’s first priority is getting flood affected residents back into their homes as quickly as possible.
At the meeting, he told the business owners they should apply for the Province’s new loan programs while they wait for financial assistance from the DRP or their insurance companies.
“We realized that insurance money and DRP funds aren’t coming in fast enough for small businesses,” said Fawcett. “You will have to access financing to help you get through.”
“What we are trying to do is supplement the DRP with some affordable bridge financing so businesses that are struggling will continue to meet their obligations can stay afloat.”
According to Pam Shewchuk, President of the Bragg Creek & Area Chamber of Commerce, many of Bragg Creek’s small business owners are struggling financially since the majority of the flood damage that occurred in the hamlet was concentrated in the business core.
She said the Province’s new loan programs are a good solution that supports small business owners.
“Bridge financing is the best thing the Province could have come up with,” said Shewchuk. “By giving them access to some cash flow the success rate of the business community will be higher throughout the province, not just Bragg Creek.”
Rocky View County Councillor Liz Breakey also said the program is a good idea.
“The government is using a free market approach,” she said. “They are using financial institutions as their instrument in the delivery of the loans that they are backing.”
“There is a limit to what the Province can do because they have to respect the taxpayers’ rights,” said Breakey.
Bragg Creek small business owners rely heavily on tourism, said Shewchuk, and the sales they make in the summer season sustain them through the slow winter months.
“Tourism dollars are down,” she said. “Businesses are going to lose a good portion of their revenue, which affects their bottom line for the off season.”
Gildemeister, who traditionally makes most of her profits during the summer, said she is worried her store will not stay open by January if she does not access a loan through government’s Hand-Up Program.
She is concerned about taking on a new loan because she may not be able to pay it back and does want to increase her debt load.
“Sales are down 40 per cent as compared to last year as there is no local economy right now,” said Gildemeister. “By winter, I’m going to be desperate for cash and I’m not going to be able to make payroll or rent by January.”
“I think it’s a good program but it’s a temporary band aid until your DPR funding comes in,” she said. “I get that it’s a 75 per cent loan guarantee, but I still have to pay it back.”
“Paying back a loan is really difficult in the grocery business,” she added.
“Do I really want to go into more debt?”
Impressed by Fawcett’s willingness to try to get answers for the local small business owners who attended the meeting, Gildemeister said, “He came across very caring and honest.”
“He is not in an easy spot,” she added. “They are working to find out answers and they are on our side.”
“At the end of the day, we want to help businesses and give them a hand up through this difficult time,” said Fawcett.
For more information regarding the Hand-up Plan - 2013 Small business recovery programs visit www.alberta.ca/Small-Business-Recovery-Program.
