Bend, Don't Break: Small Business Financial Resilience after Hurricanes Harvey and Irma

Abstract

This report assesses the impact of hurricanes Harvey and Irma on small businesses’ cash inflows, outflows and balances. We leverage an anonymized sample of 40,000 firms who hold business banking deposit accounts with Chase to produce a daily view of small business cash flows from August 2017 to November 2017. We find that cash balances for the typical small business dropped by 7.4 percent after landfall in Houston and Miami, but recovered within two to three weeks. Moreover, inflows dropped by over 63 percent and recover in about a week, and outflows dropped by over 54 percent and recovered in two to three weeks. While balances and cash flows fell in all industries the week of landfall, construction, repair and maintenance firm balances increased the most in the weeks following landfall. These findings provide insight into the major financial disruption that small businesses experienced in the wake of Hurricanes Harvey and Irma, and the relative financial resilience of firms in the face of these impacts.