NEW YORK—The Federal Reserve Bank of New York today released information about small businesses impacted by Superstorm Sandy. Of the 950 firms located in FEMA-declared disaster areas in New Jersey, New York City, the Hudson Valley and coastal counties in Connecticut included in the study, 40 percent reported being financially affected by the storm, either positively or negatively.
Roughly one third of affected firms had no insurance and only a few had business disruption or flood insurance. Half of the firms covered storm-related financing needs with personal resources while others increased debt levels.
About one third of polled firms incurred financial losses. Of those, 22 percent had losses greater than $100,000. The top sources of losses for firms included decreased customer demand (59 percent), utility or service disruption (43 percent), and damage to or loss of assets (29 percent). Firms that incurred losses said their main financing need was meeting operating expenses (34 percent).
Eight percent of interviewed firms reported net financial gains after Superstorm Sandy. Of those, one in four was in the construction sector and two in three saw revenues increase as a result of the storm. Moreover, 28 percent reported gains greater than $100,000.
Additionally, one year later, nine in 10 firms report persisting financing needs, mostly of $100,000 or less, to cover operating expenses or to reposition their business. Of firms reporting losses, 43 percent cited financing needs of $25,000-$100,000 and of firms reporting gains, 46 percent cited financing needs for the same amount.
This poll is part of the New York Fed’s efforts to understand the issues of communities in the region and understand Superstorm Sandy’s impact on small businesses and progress with recovery efforts. Firm responses were collected online between October 10, 2013 and December 31, 2013.
About the Small Business Credit Survey
The Small Business Credit Survey (SBCS) is a semi-annual establishment survey conducted by the Federal Reserve Bank of New York in partnership with the Federal Reserve Bank of Philadelphia, reporting information about business performance, financing needs and choices, and borrowing experiences. The SBCS captures the perspectives of businesses with fewer than 500 employees in New York, New Jersey, Connecticut, and Pennsylvania. The SBCS is distributed through civic and non-profit partners, primarily Chambers of Commerce, industry associations, and development corporations/authorities.