March 7, 2005
Quick response saves several companies from potential closure
When the skies opened in the summer of 2004 and rain flooded many areas of Peterborough County, it was the quick action of concerned organizations and individuals that helped several small and medium-sized businesses keep their heads above water, saving them from potential closure.
Many households and business owners awoke to 190 mm of rainfall onthe morning of July 15, 2004. The rainfall affected key commercial areas throughout Peterborough County, and many businesses lost inventory, equipment, files, office furniture, income and sales.
For some, closure was a real threat. It was in these circumstances that the community came together to ensure the economic survival of small businesses in the county.
“The immediate concern was for businesses directly affected, and their ability to maintain operations in the face of overwhelming sustained loss,” says Judy Heffernan, General Manager of the Greater Peterborough Business Development Centre Inc., a Community Futures Development Corporation (CFDC). “Within 72 hours, the CFDC, Human Resources and Skills Development, city and county officials, the Downtown Business Improvement personnel, the Chamber of Commerce, MP Peter Adams, MPP Jeff Leal and concerned individuals met to discuss ways and means of assisting these businesses”
The CFDC received Industry Canada’s immediate support to use available investment funds to respond to the needs of affected businesses. This meant that non-interest bearing loans could be set up for those businesses that qualified. Several partners came on board to put the program in place. The CFDC Board of Directors approved specific terms of repayment, a solicitor waived his fee and worked closely with the CFDC and city solicitor to draft an agreement between the City and County of Peterborough and the CFDC, and the city and county guaranteed the full repayment of the loans if the CFDC met appropriate conditions.
A two-page application for loans was developed, and new security documents also had to be created because of the assignment of insurance and/or Ontario Disaster Relief Assistance Program claims. Board members committed personal time to assess the applications and supporting documentation. The loans are carried over a five-year term. The project began July 15, 2004, and will continue until October 2009, when all loan funds become due and payable. The results of this initiative are impressive. Of the 70 downtown businesses hit the hardest, 47 per cent made application for funding for over $1.2 million. Sixty one per cent of these applications were approved, and over $580,000 in funding was delivered to the businesses within 24 hours of applying and registering the security.
“Total annual revenues of over $10 million would potentially have been affected if interim CFDC funding had not been available,” says Heffernan. “The long term benefit to the community was 14 businesses remaining operational that would have closed without the immediate assistance of the CFDC.”
Beyond these 14 businesses, a total of 70 businesses contacted the CFDC for additional services, including retrieving corporate tax returns lost in the flood, preparing interim financial statements, developing marketing initiatives to entice patrons back to the businesses, and developing new business plans to proceed in the wake of the tragedy. All of this helped to make it business as usual for many Peterborough companies.
When disaster strikes, time is critical. The CFDC’s ability to bring together the necessary partners and initiate interim funding ensured that businesses received the help they needed when they needed it most.