Small Businesses Take Big Hit From Climate Disasters

Small US businesses suffer heavily from climate disasters. Asheville's Hurricane Helene example shows many never recover due to lack of prep, slow aid, or weak insurance. Experts call for better planning, funding and community support.

Hurricane Helene in 2024 devastated small businesses in Asheville, North Carolina. Many lost livelihoods, while aid and insurance were often too slow or insufficient. Experts urge better preparation, faster aid, and new funding models. In a report published by Grist, Small businesses are vital to communities in the United States. They create jobs, add charm and support local economies. But when natural disasters like hurricanes or floods strike, these smaller businesses often suffer the most and take the longest to bounce back.

Asheville's struggle after Hurricane Helene

In fall 2023, Hurricane Helene flooded Asheville, North Carolina. The city is known for its artists, breweries and boutiques. But after the storm, these businesses were hit hard.

Kyle McCurry, director of public relations for Explore Asheville, said the media mostly showed buildings damaged by floodwaters. But he added that many small businesses faced slow recovery and serious financial losses.

How small businesses get hurt more

Grist report quotes Shehryar Nabi of the Aspen Institute saying that the small shops face many challenges in disasters:

• They can't prepare as well as big companies.
• They often lack extra cash to rebuild.
• They may not qualify quickly for loans or insurance payouts.
• Tourism drop hurt Asheville's economy

Visitors spent $2.9 billion in Asheville in 2023. The storm hit just before the fall tourist season, the time when many people come to see the autumn colors. This caused a 20 to 40 percent drop in business revenue.

Many spots never reopened fully, including Vivian’s restaurant, Pleb Urban Winery, TRVE Brewery and New Origin Brewery. Some had more damage when railroad cars floated into buildings.

Insurance didn't cover full costs

New Origin Brewery's co-founder Dan Juhnke explained that even their flood insurance claim was not enough. They avoided taking large loans from the Small Business Administration and instead signed up for a FEMA program to buy out flood-damaged properties. They have been waiting nearly a year for the process to finish.

Few reopen after disaster

By 10 months after the storm, only about 85 percent of Asheville’s businesses had managed to reopen. That is slightly better than national data. According to FEMA and the US Department of Labor:

• 40 percent of small businesses never reopen.
• Another 25 percent close within a year after a disaster.

Limited help from government aid

Federal support often comes too late:

• FEMA offers help for individuals and public services, not much for businesses.
• SBA loans can take many months to be approved.

Only 14 percent of businesses get federal help, as shown in a 2021 survey by the New York Federal Reserve.

Community and private aid fill gaps

Local groups and investors can help. For instance, Explore Asheville raised $2.1 million and supported over 500 businesses. New Origin Brewery raised over $100,000 through GoFundMe, but still needed more.

Natural disaster: Planning matters a lot

Benjamin Collier of the Wisconsin School of Business says that good planning helps businesses survive. This includes:

• Understanding insurance coverage.
• Having backup plans for inventory.
• Avoiding disruptions.
• These steps don't cost much, but many small business owners skip them.

Experts recommend:

• Parametric insurance that pays automatically during a disaster.
• More funding before disasters, not just after.
• Government incentives for disaster-proof upgrades.
• Hiring local small businesses for rebuilding projects.
• Creating a "Small Business Resilience Czar" to streamline help.

Small businesses bring life and character to towns like Asheville but they are fragile. When disaster strikes, their survival often depends on planning, community effort, and policies that act early. We must help them build resilience now, not just clean up later.