Snow business
Today: Where the money went, and why
Wednesday: Should a lack of snow be considered a federal disaster?
Thursday: Efforts to 'save winter' in a warming climate
A year ago at this time, the owners of the Starvation Lake Corner Store were staring at some scary numbers.
Troy and Terri Robertson’s small gas station and convenience store is in a remote part of Kalkaska County, and it makes a good chunk of its profits in the wintertime from snowmobilers coming off a popular trail network nearby.
Troy says a good stretch of snowfall can bring over 500 snowmobilers through his store in a single day.
But in December 2023, it didn’t snow until right after Christmas, meaning they lost the business of the snowmobilers for that entire month.
“There was no money coming in. We weren't making sales,” Terri said. “You get a little stressed out, because you've got a mortgage to pay, you've got food to put on the shelves, and when you're not making it — it’s a little stressful.”
Last December, they made around $18,000 in sales. A good December, like this one so far, brings in closer to $50,000.
The first few months of 2024 weren’t much better. The snow that did come melted away quickly, and snowmobilers stayed home.
The Starvation Lake Corner Store is just one of many small businesses across Michigan that rely on snowfall and low temperatures to turn a profit.
The Robertsons learned from their accountant that they were eligible to receive federal small business loans after a “drought and excessive heat disaster” was declared for their county.
They received a loan of close to $7,000 — a little more than one full month of profit during a busy winter.
“The impact that it had for us was that it allowed us, for one month, to be able to catch up, because purse strings were tight,” Troy said.
Where did that money go?
That money was a small piece of the more than $15 million in loans that went out to businesses in Michigan affected by the drought. The money came from the Economic Injury Disaster Loan program from the U.S. Small Business Administration (SBA).
Businesses had to prove that the drought affected their profits. Since the drought spanned the winter months, that meant any loss of business due to a lack of snow could be covered.
According to SBA records obtained by IPR, 133 businesses in Michigan received a loan because of three drought declarations in the state. Businesses in Wisconsin and Minnesota also received loans under the same program.
Business owners like the Robertsons eventually have to pay back the SBA. They received the money in April and have one year to repay it without interest.
The money went to all kinds of businesses across a variety of industries.
Much of the money went to the tourism industry — hotels and travel lodging in general got a total of almost $2.5 million. Another $2.3 million went to food service businesses like restaurants. Dealers of recreational vehicles, like snowmobiles, got a combined $1.2 million, and skiing facilities got more than $1 million as well.
But some other recipients might be more surprising. For example, logging companies got over a million dollars. They rely on cold temperatures to access the woods and transport lumber without tearing up the ground.
There’s also a chocolate shop on the list.
Jody Hayden, co-owner of The Grocer's Daughter chocolate shop in Empire, says visitors pass through her store on their way to cross country ski trails in the forests of the Sleeping Bear Dunes National Lakeshore.
Last year, Hayden said, "folks that like to come and go skiing and snowshoeing weren’t coming."
She said if visitorship goes up or down, "we feel it at our little shop, and last winter was definitely a down year."
The loss of business convinced her to apply for the same kind of loan as the Robertsons, along with other factors. For example, the cost of cocoa had tripled from the year before.
"We plan ahead, and I’m always watching months in advance on what might be coming our way," Hayden said.
The SBA process
In the application, businesses explain what they do and how the drought or heat caused problems for them.
Liliana Tschanett, public affairs specialist for the SBA’s Office of Disaster Recovery & Resilience in Atlanta, said loan officers evaluate which parts of the businesses’ profit margins were harmed by the drought.
They look at tax returns and compare records from the current year to those of previous years.
“If it’s a significant economic loss,” she said, “then they will offer a loan based on that economic loss.”
Tschanett says the process actually starts with the federal Farm Services Agency, part of the U.S. Department of Agriculture.
After the USDA declares a drought or excessive heat disaster and opens up its loan programs for agricultural businesses, the SBA can then accept applications for Economic Injury Disaster Loans (EIDL).
This year, the SBA’s pool of money for the loans ran dry after Hurricane Helene, when so many small businesses in that part of the country applied for disaster loans that the SBA announced they were out of cash.
And while these kinds of loan programs can help, some say they’re stopgaps to larger problems climate change may pose to small businesses.
Climate change could make El Niño weather patterns, which played a role in last year’s warm winter, more frequent and more intense. That, in turn, could increase the strain on programs like the EIDL loans offered by the SBA.
And the loans unlocked through drought declarations leave some small businesses behind. If a business falls in a county without a declaration, they're not eligible for this type of loan, even if they could prove they were harmed by a lack of snowfall.
Instead of relying on drought declarations to unlock funding, some lawmakers want to make a snowless winter its own official kind of disaster.
We look at that proposed change, and what it means in a warming world, in the next part of our series tomorrow.
IPR’s Izzy Ross contributed to this report, made possible through a partnership between IPR and Grist, a nonprofit environmental media organization.
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