- Small businesses are struggling to stay afloat after the deadly Los Angeles wildfires.
- Many structures have been destroyed, but others left standing are damaged, with no business of traffic.
- For some thin-margin industries, days without business alone have forced permanent shutdowns.
As deadly wildfires continue to rip through Los Angeles, leveling residential and commercial districts alike, small business owners whose storefronts were left standing aren’t out of the woods.
Although more than 12,300 structures have been destroyed by the fires, commercial buildings that have not reached their total are still struggling with costly damage to repair and no foot traffic business.
For some thin-margin industries – like bars and restaurants – going just a few days without business has begun to force permanent closures.
AccuWeather estimates the damages and economic losses from the wildfires to be between $250 billion and $275 billion, making it one of the costliest wildfire disasters in modern U.S. history.
“We have come to the profound decision that at this time, operating Ruby Fruit is no longer possible due to the financial impact from the current natural disaster,” Emily Bielagus and Mara Herbkersman, owners of The Ruby Fruit, a lesbian wine bar in the Neighborhood Silver Lake, posted Sunday on the venue’s Instagram page.
“Sadly, along with all the feelings of grief and shock we’ve experienced over the past few days, has come this undeniable reality: that running our small business is no longer sustainable. The hospitality industry works every day. and now , as they say – math just isn’t math,” they write.
The announcement was met with an outcry from devoted fans and patrons of the bar — one of the only bars in the city that caters specifically to lesbians and “those who fall under the Sapphic umbrella,” according to the bar’s website.
Several customers, in comments on the bar’s closing announcement, pleaded with Bielagus and Herbkersman to create a community fundraiser to save the business. Ruby Fruit’s GoFundMe campaign – raising money to provide salaries for bar staff – has raised about half of its $15,000 goal in three days.
Bielagus and Herbkersman did not immediately respond to a request for comment from Business Insider.
Financial assistance is available for small businesses trying to recover from the effects of wildfires. The Small Business Administration’s disaster loan program offers up to $2 million in low-interest loans to eligible businesses that suffer economic loss and physical damage due to disaster Interest on these loans does not start to accrue for a year.
On Monday, California Gov. Gavin Newsom announced an extension of tax filing deadlines and relief from interest and penalties for businesses affected by the wildfires. However, tax breaks and interest-bearing loans are nothing compared to regular business, and the costs accrued from the shutdown add up quickly.
“Thankfully we are safe and, as of now, able to operate,” Betsy Martinez, owner of Fan Girl Cafe in West Hollywood, told BI. “However, business has obviously been affected by the situation and we are navigating it as best we can.”
Martinez, who runs Fan Girl Cafe with her wife, said the pair lost roughly $5,000 in just two and a half days of closure, in addition to slow business in the days that followed. As a new restaurant in its first year of operation, margins were already tight. They are now considering debt consolidation and getting a new loan and have contacted their existing lenders asking for extensions on their bills.
Some business owners are turning to the local community for financial support, but such funding is unsustainable – and mostly targeted at businesses that have gone bust. Restaurants, including Fox’s Restaurant, The Little Red Hen Coffee Shop and The Reel Inn, have all burned down and started GoFundMe campaigns to raise money for rebuilding.
Martinez said she and her wife aren’t comfortable starting a GoFundMe, given how tight funds are for everyone else — and that other businesses are facing more severe losses.
“It’s just a tough time right now for everybody,” she said. “Right now, we’re just looking at who we can help, even those of us who need help.”
Right now, many small business owners in the Los Angeles area are slugging it out through another costly disaster, just a few years after the COVID-19 pandemic saw more than 7,500 small businesses close across the county, reported California Business Journal.
“We closed last week and are closing this week. We hope to reopen next week,” the owners of Honey’s at Star Love, a queer bar in Little Armenia, told BI in an email. “We are taking it all day by day”.
