Foundation for Puerto Rico announces post-hurricane results of business support program
SAN JUAN – Foundation for Puerto Rico (FPR), a nonprofit that helps foster the island’s economic and social development while focusing on the visitor economy by making an impact on the all-important tourism sector, announced the results of its Small Business Cash Grant program, which provided capital and technical assistance in the aftermath of Hurricane Maria.
After conducting a study on its effort, and using what was learned, the foundation also presented policy recommendations to support businesses after disasters.
In addition, the public charity launched a fundraising campaign on GoFundMe to continue supporting small and midsize businesses on the island. Through the initiative, FPR aims to raise $240,000 to provide cash grants that will help struggling businesses become more resilient or even expand by also providing technical assistance and business-coaching support. Sam’s Club, the retailer and a membership warehouse club, was the first backer of the crowdfunded project, donating $10,000.
FPR identified small and midsize businesses throughout the island that had not been able to reopen or were experiencing difficulties remaining open or retaining employees and created the Small Business Cash Grant Program, which with economic incentives and technical assistance supported 200 businesses in 11 municipalities, via a combined $500,000 investment.
“The encouraging results we are announcing today about the impact of providing capital and technical assistance to small and midsize businesses have left us committed to incorporating timely support as an essential part of our programs. We will continue to expand the reach of this aid across the island in partnership with the [foundation’s] ecosystem [network] and the communities,” FPR President and COO Annie Mayol assured.
The Federal Emergency Management Agency (FEMA) estimates that 40% to 60% of small businesses do not reopen after a disaster, while another 25% fail within one year. However, 93% of the businesses that benefited from the Cash Grant program continue operating, a year after the first of two back-to-back hurricanes struck the island.
Also, as a component of the study carried out, a survey was conducted among the participating businesses, revealing that the assistance provided by FPR helped 91% of them to remain open, while others increased sales, hired employees and added business hours, among other improvements.
On the other hand, 51% of businesses reported a sales decline compared with the same month last year, while, on average, businesses are running with 20% to 25% fewer employees than before the historic storms hit.
“The data validate how necessary it was to have expanded the program, as well as the need to continue supporting small and midsize businesses because many still are having difficulty returning to pre-Maria levels,”noted FPR’s Research and Analysis director, Arnaldo Cruz.
When asked what their biggest obstacle is today, 66% of business owners said they did not have enough local customers; 60% said they received barely any tourists; 55% pointed out difficulty in getting the products they need, 50% stressed issues with their insurer; 42% commented on the difficulty of accessing finance; and 41% said retaining employees has become a challenge.
In the case of Orocovis, the municipality with best results, FPR provided economic incentives to businesses on the so-called Ruta de la Longaniza, which are renowned for their Puerto Rican-style sausage, as well as those adjacent to the town’s plaza, and implemented its pilot “Bottom Up Destination Recovery Initiative,” a community-targeted economic development program created earlier this year in response to Maria.
As part of Bottom Up, emphasis was put on fostering resilience against future disasters by providing hours of additional educational assistance on preparedness and the use and installation of basic equipment included in a Business Resiliency Kit such as solar lamos and water filters.
“Stemming from these results, we can conclude that these additional components of Bottom Up were partially responsible for Orocovis businesses recovering faster in relation to other areas where we also help,” Cruz said.
The Cash Grant program was deployed in Aguadilla (Highway 10), Cabo Rojo (Boquerón and Joyuda), Culebra, Humacao (Punta Santiago), Isabela, Juncos, Orocovis (Ruta de la Longaniza and the plaza), Ponce (plaza) and San Juan (Loíza Street, Santurce).
At the end of last month, the U.S. Commerce Department’s Economic Development Administration (EDA) awarded a $5.58 million grant to FPR to expand Bottom Up to 24 communities in 12 municipalities.
The foundation estimated that the program’s technical assistance component will support 300 businesses and that 72 new businesses will be created. Furthermore, 816 people will benefit from the assistance, which will have an impact on 1,116 jobs, among other positive effects.
To achieve this, FPR announced partnerships with leading organizations such as the Center for Entrepreneurs, Banco Popular Foundation, Grupo Guayacán and Kiva Puerto Rico to improve and accelerate the technical assistance provided to businesses.
As part of the event, a dialog panel was held with Ricardo Llerandi, the executive director of the Puerto Rico Trade & Export Co.; Lucy Crespo, executive director of the Puerto Rico Science, Technology and Research Trust; Laura Cantero, executive director of Grupo Guayacán; and Nerma Albertorio, executive director of the Center for Entrepreneurs.