- Small businesses are struggling to stay afloat in the wake of the deadly Los Angeles fires.
- Many structures have been destroyed, but others left standing are damaged, with no foot traffic driving business.
- For some industries with slim margins, just days without business has forced permanent closures.
As deadly fires continue ripping through Los Angeles, leveling residential and commercial districts alike, even small business owners whose storefronts have been left standing aren’t out of the woods.
Though more than 12,300 structures have been destroyed by the fires, commercial buildings that haven’t been totaled are still struggling with costly damages to repair and with no foot traffic driving business.
For some industries with slim margins — like bars and restaurants — going just days without business has begun to force permanent closures.
AccuWeather estimates the damages and economic loss from the wildfires totals between $250 billion and $275 billion, making it one of the costliest wildfire disasters in modern US history.
“We have come to the heartbreaking decision that at this time, operating The Ruby Fruit is no longer possible due to financial impact from the current natural disaster,” Emily Bielagus and Mara Herbkersman, owners of The Ruby Fruit, a lesbian wine bar in the Silver Lake neighborhood, posted Sunday on the bar’s Instagram page.
“Sadly, along with all the feelings of grief and shock that we have experienced over the last few days, also came this undeniable reality: that running our small business is no longer sustainable. The hospitality industry functions on a day-by-day basis and right now, as they say — the math just isn’t mathing,” they wrote.
The announcement was met with an outcry from fans and devoted patrons of the bar — one of the city’s only bars catering specifically to lesbians and “those who fall under the sapphic umbrella,” according to the bar’s website.
Some customers, in the comments of the bar’s closure announcement, begged Bielagus and Herbkersman to create a community fundraiser to save the business. The Ruby Fruit’s GoFundMe campaign, raising money to provide wages for the bar’s staff — has raised about half its $15,000 goal in three days.
Bielagus and Herbkersman did not immediately respond to a request for comment from Business Insider.
Financial aid is available for small businesses trying to recover from the aftermath of the wildfires. The Small Business Administration’s disaster loan program offers up to $2 million in loans with low interest rates for eligible businesses suffering economic losses and physical damage due to disaster. Interest on these loans does not begin to accrue for a year.
On Monday, California Gov. Gavin Newsom announced extended tax filing deadlines and relief from interest and penalties for businesses impacted by the fires. However, tax breaks and interest-accruing loans are nothing compared to regular business, and the costs accrued from being closed stack 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 definitely been impacted by the situation and we are navigating it the 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 closures, in addition to the slow business in the days since. As a new restaurant in its first year of operations, margins were already tight. They’re now considering debt consolidation and taking out 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 funds are inconsistent — and largely targeted toward businesses that have been destroyed. Restaurants, including Fox’s Restaurant, The Little Red Hen Coffee Shop, and The Reel Inn, have all burned down and have started GoFundMe campaigns to raise money to rebuild.
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 dealing with more severe losses.
“It’s just a heavy time right now for everyone,” she said. “Right now, we’re just looking at who we can help, even those of us who need help.”
For now, many small business owners in the Los Angeles area are white-knuckling it through another costly disaster just a few short years after the COVID-19 pandemic saw more than 7,500 small businesses shutter across the county, the California Business Journal reported.
“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’re taking it all day by day.”
