Lending an ear to Mississippi business owners
Management counselor John Rainey helps businesses recover from Hurricane Katrina
By Angela Bazydlo Photos courtesy of John Rainey
Throughout his 10-year career, John Rainey, senior management counselor with the Small Business Development Center (SBDC) at Clark, has worked with more than 2,000 clients. He routinely provides critical business advice to start-up, first-time business owners, many of whom have become highly successful. Rainey realizes some might stumble upon hard times, but with sound guidance and access to resources, most have a reasonably good chance to succeed.
The counselor admits, however, that owning a business has its challenges.
"I deal with a lot of companies in financial difficulties. It's very emotional," says Rainey, who even provided counseling to business owners affected by Sept. 11, 2001.
But none of Rainey's counseling experience can match the intensity of a two-week mission in Hattiesburg, Miss., where he helped business owners whose livelihoods were affected or destroyed by Hurricane Katrina in August 2005.
Due to the widespread devastation caused by Hurricane Katrina, the Small Business Administration (SBA) was inundated with requests for business loans. In the days and weeks following the disaster, 300 business people sought help from two SBA counselors set up at the Lake Terrace Convention Center in Hattiesburg.
"There were so many people, they ran a classroom, explained the forms and sent them away with the forms," says Rainey. The SBA, through their partnership with the SBDC, sent out a call to find counselors across the United States willing to help business owners in the disaster-stricken area with loan processing.
Rainey readily volunteered.
The cost of disaster
From Sept. 26 to Oct. 8, 2005, Rainey and five other counselors from SBDCs in Nebraska, Florida, Tennessee, New Mexico and Arizona provided crucial counseling services to business owners from Hattiesburg, Petal, Summit, Collins, Waynesboro and Prentiss, Miss.
Their first task in Mississippi: to call back the 300 people who originally sought assistance and meet with them. The counselors helped business owners complete applications for physical disaster loans (which provide funds to repair or replace business property for uninsured losses up to $1.5 million) and economic injury disaster loans (which provide up to $1.5 million in working capital to businesses that suffer economic injury as a result of a disaster).
"We had to get them back in business, stabilized and restarted," says Rainey. Most were cash businesses—convenience stores, gas stations, farmers. "Some lost their entire life savings, but they had a lot of faith that they would come out of this all right."
Among his clients was a retailer who lost all back-to-school sales and a dairy farmer whose milk spoiled because of a week-long power failure and because deliveries couldn't be made to a processor. He worked with a dentist, who had opened up a practice only a week before the hurricane hit, to process paperwork for an economic impact loan. Although the dental practice sustained minimal physical damage, it was closed due to power and telephone outages.
All business owners were left with lingering, unanswered questions about future sales and the economic vitality of the region, given that many of their customers had evacuated the area or are now spending their money on home repairs.
‘Survival counseling'
Over the two weeks, Rainey and his colleagues counseled approximately 150 business owners. At home, they average three hours per client. But on this mission they spent 12 to 14 hours with some clients. They collected documentation and tax returns, and described the types of loans available to business owners. They walked many clients who had "forgotten their glasses"—a phrase Rainey soon recognized as an indication that the client was illiterate—through three- to four-page loan applications. Most importantly, the SBDC counselors listened to sad stories of loss and provided encouragement to their clients.
"Survival counseling" Rainey calls it.
The first person Rainey met in Mississippi lost a mother and an aunt to the disaster. Both were on a bus of nursing-home evacuees that caught fire on a highway while traveling from Houston to Dallas.
"After that incident, the first question I asked my clients was, ‘Is your family okay?'" says Rainey.
Rainey and his colleagues, who lived in cubicles and slept on air mattresses at a Christian Family Worship Center, returned home physically and emotionally exhausted. "I slept for three days," he says.
In his office on the Clark campus, Rainey recalls his whirlwind visit to the area and says he draws on that experience now and passes it on to his current clients.
"When I tell them about the clients in the South, they say, 'I guess I'm not that bad off, am I?'"
The week of Thanksgiving, Rainey received a call from the dentist to report that his disaster loan had been approved. He expects to hear from others he counseled in Mississippi who had tougher problems. When and if they call, he'll be ready to lend them an ear.
After Hurricane Charley in 2004, the SBA received 27,000 business referrals for loan applications. After Katrina, there were 235,000 business referrals. At the end of October 2005, the SBA had received 14,000 applications for the two types of business disaster loans it offers.
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