Thursday, February 15, 2007
So you add it up
I would like to know who ? thought out the formula for distributing grant money to small businesses disrupted by Katrina.
Unless you happened to be listening to WWL radio you probably would not even know that The State was planning to hand out $20K per affected business that can pass the criteria. First come first served and all in person I might add. Oh and if you are just hearing about it now – too late the application period was only 10 days.
Not to mention that the “intake centers” were all in odd places with even odder hours the whole criteria for who should or should not get the money was completely unfair and bias.
The criteria is that 2nd quarter sales figure for 2006 had to be 30% less than those for 2nd quarter 2005. Sounds fair? Not really.
You had to also be in business at least 6 months prior to Katrina.
So let’s say you open a business is Jan of 2005 – The first quarter is always hard so you don’t make much The Second Quarter goes better
1st 2005 $10000
2nd 2005 $15000.00
Then Katrina hits and you simply decide to hell with it, my business is destroyed and I may rebuild – but I really cant until well there are tourists and grants and people back.
So – you are in town filling out your sales tax forms with zeros and waiting for something to happen. Jan 06 comes around and you are still not ready to open up. April comes around and well you are sort of ready, but only really doing as you have time.
1st 2006 $0.00
2nd 2006 $5000.00
Why are the sales figures so low? Maybe you did not try to get off your ass and make the business work. Maybe you did not get a SBA loan and put your house up as collateral. May be you are simply waiting for a government hand out without doing anything.
Well if that is what you are waiting for BINGO you won. Because you sat on your ass and did nothing you qualify for the GRANT because your figures 2nd Quarter 2006 are 30% less than 2005. No questions nothing – you qualify.
Suppose you had a business that had been around for 10 years. You have put all your savings in it and have worked hard.
1st 2005 $50000.00
2nd 2005 $60000.00
Life is great – the tourists are here and then Katrina Hits.
1st 2006 $15,000.00
2nd 2006 $50,000.00
Why are the sales figures so much higher than the other guy? Well maybe you got off your ass and worked hard to build your business back up. Maybe you took out a SBA Loan and used your house as collateral. Maybe you spent hours laboring and advertising your business to get it back up and running. What – there is grant money available? WOW that is really unexpected – but great I really could use it. I have worked so hard.
BAAAAAAAAAAAAAAAAAAAAA you do not qualify. Your 2nd quarter figures when comparing 2005 to 2006 do not reflect a 30% loss. You only have a 17% loss
So you point out to the person in charge – well I worked hard and took out SBA and personal loans to get my business up and running. Sir / Madam if you would consider even an average of 1st and 2nd quarters 2005 VS. 2006 you can see that the average reflects a 41% loss – and you said I could pick a different quarter if applicable how about 1st quarter figures? That reflects a 70% loss.
BAAAAAAAAAAAAAAAA we really did not mean you could pick a different quarter you have to use the 2nd quarter or take an average of all your quarters 2005 and compare that to 2nd quarter 2006. So you think ok let me figure this out ( trust me if you went back and got yourself up and running you will never qualify this way, but lets take a look)
1st 2005 $50000
3rd 2005 $45000 (remember that Katrina happened the last day of Aug – so you have 2 good months
4th 2005 $ 0.00 – say you did not even get back up and running
Well that adds up to $155,000.00 – divided by 3 quarters as you were not open 4th quarter =51,666 – which is certainly not a 30% loss against 2nd Quarter 2006.
Ok let’s pretend that you had sales 4th quarter 2005 so that we are allowed to divide by 4 instead of 3. Let’s say you make $20000.00 – not likely but let run the figures.
$175000/4 = $43750
You do not qualify that is only a 12% loss.
As you may note from this long accounting process, the only people that benefited from this program are the same people who have benefited by doing nothing at all through the whole process.
Yes you are correct in assuming that I did not qualify, but this is not sour grapes you hear – this is a justification of why the program was poorly done as has been every governmental attempt before during and after Katrina.
I do not think many people will read this through, but it made me feel better putting it in black and white.