Written by John Boyle, Asheville Watchdog.
It was a tough pitch.
Small Business Administration Administrator Isabel Casillas Guzman came to two of the hardest hit parts of Asheville on Tuesday, October 8, touting the power and flexibility of low-interest SBA loans for hard-hit business owners.
The SBA offers low-interest loans for businesses and nonprofits of up to $2 million, which can help with property damage and business disruption, Guzman said as she stood outside the ruined 12 Bones Smokehouse restaurant in the River Arts District. The first year is interest free, she noted.
Also, the SBA offers home loans of up to $500,000 at rates as low as 2.8 percent, and even $100,000 loans for renters as well.
Guzman said she is well aware that many local business owners are still sorting through mud, waterlogged walls and ruined inventory, and may not be keen on taking on more debt.
“I think it’s just about calculating what works for you,” Guzman said. “I mean, if you need that extra benefit of this federal resource, especially with the 12 months to provide you that cushion as a bridge, in essence, then, the SBA can be here to help you with that process.”
At 12 Bones, owners Bryan and Angela King listened intently to Guzman and thanked her for coming to town, but afterward said they’re really still in shock and mainly focused on making sure all their employees are taken care of. They were able to reopen their south 12 Bones Smokehouse location in Arden Tuesday, but the RAD location had French Broad River water up to the rafters and will be closed for months, at least.
“There’s just so much to assess and figure out,” Bryan King said. “We don’t own either of the buildings that we’re in. So at the River Arts location, we’re getting with our landlord, figuring out what’s even feasible. It’s gonna take some time for sure.”
“We just finished paying off the River (location) loan from 2017 last year,” Angela King added. “We still have a loan on the south location and the brewery operation.”
In short, it’s a lot to consider more debt right now, even low-interest loans.
“We’re not totally opposed to it,” Bryan King said. “I guess we just need to run some numbers and figure out what is going to work for us.”
SBA Was There in 2004 Flood
In Biltmore Village, Joe Scully and Kevin Westmoreland, co-owners of The Corner Kitchen restaurant, also met with Guzman, as well as Asheville Mayor Esther Manheimer and council members Kim Roney and Maggie Ullman. Their restaurant is about a half mile from the Swannanoa River, but the 1895 structure had water up to the ceiling.
Scully said the building flooded in the last major flood, in 2004, and they used a $276,000 SBA loan then. The partners have already decided that an SBA loan will be part of their 2024 recovery plan.
“We have the applications already filled out, man,” Scully said.
The amount they’ll take out is up to the SBA, Scully said.
“They’ll say exactly,” Scully said. “They look right down your drawers to see exactly where you stand financially and what the cash flow is, et cetera, and then they estimate.”
Scully estimated their damages between $500,000 and $1 million.
The partners have flood insurance, and they’re hoping to cobble together the renovation from insurance funds, grants, and an SBA loan. Scully said he hopes they don’t have to take out as much as they did 20 years ago.
Westmoreland and Scully also own Chestnut restaurant downtown, and that will certainly help with cash flow, Scully said.
While some may question the wisdom of rebuilding in a notoriously flood-prone area, Scully said Biltmore Village — built in the 1890s for workers constructing George Vanderbilt’s Biltmore Estate — is part of the fabric of this city, just like the River Arts District is. He’s also heavily invested in his buildings, just as other shop owners and restaurateurs are.
“What are you going to do, demolish this place?” Scully said. “Because it actually does have true historic significance, in my opinion.”
In a larger sense, he said, he’d like to see funding made available to raise buildings in the village, but he knows that may be a “pipe dream.” Scully also notes that Biltmore Village returned to viability after the 2004 flood and the notorious 1916 flood, which before Tropical Storm Helene was the benchmark for catastrophic flooding in the area.
Not Looking for More Debt
In the River Arts District, Mark and Julia Goldthwaite, owners of the Guitar Bar in the Cotton Mill Studios building, weren’t on the SBA tour, and they’re not looking to sign up for loans.
“We’re already dealing with loans from COVID, and we don’t need more loans,” Mark Goldthwaite said. “We need financial support. We live hour to hour right now. We’re 12 days in, and you can see we’re still still dealing with this, and it still hasn’t hit us emotionally either.”
The water rose 12 feet high inside their building, and their popular bar is a total loss.
“We’re absolutely on the same page with that,” Julia Goldthwaite said, referring to more loans. “We have two Disaster Relief loans from COVID already, and we’re in this by ourselves. It’s our own pockets, and we don’t have the finances to pay and compound other disaster relief loans as well. It’s just not feasible for us.”
The Goldthwaites, whose bar is about 100 yards from the French Broad River, did not have flood insurance.
“It’s cost-prohibitive for a small mom and pop business like us,” Julia Goldthwaite said.
“Three-Legged Stool”
Back outside 12 Bones, property owner Eddie Dewey said he and his business partners are open to SBA loans for renovating the multiple old warehouse buildings they own in the RAD. Dewey said he considers SBA loans potentially part of a “three-legged stool” of financing that could help them rebuild.
That could include private financing and government loans, as well as flood insurance proceeds and possible FEMA disaster relief grants, Dewey said.
Guzman said her hope is that business owners will at least consider SBA low-interest loans as one tool in helping to rebuild.
“We’re really about filling gaps in the marketplace of insurance so that we can make sure communities can get stabilized economically as quickly as possible, and start to restore those business employment numbers that we want to see in this area,” Guzman said.
She said loans are not capped in any particular disaster area, and disbursement is based on demand.
“We are servicing 36 disasters right now across the country, in more than 350 counties,” Guzman said. “But SBA stands ready to help people and support them.”
She said President Joe Biden has “called on Congress to replenish the funds at SBA to ensure that we can carry through all of these disasters, plus (Hurricane) Milton that’s on the verge of hitting in Florida, Georgia and South Carolina.
“So the SBA will need additional funding to carry us through the year, but we will be on the ground to help people process everything and stay here until it’s done,” she said.
The SBA’s Business Recovery Center in Buncombe County is located in the Asheville Chamber of Commerce building at 36 Montford Ave. It’s open from 9 a.m. to 6 p.m., Monday through Friday, and from 9 a.m. to 3 p.m. on Saturdays.
Asheville Watchdog is a nonprofit news team producing stories that matter to Asheville and Buncombe County. John Boyle has been covering Asheville and surrounding communities since the 20th century. You can reach him at (828) 337-0941, or via email at [email protected]. To show your support for this vital public service go to avlwatchdog.org/support-our-publication/.