SCENARIO: Mr. Lucci began supplying cars to the movie industry in 1975. Lucci Auto Props, a business he owned with his brother, was based in Red Hook, Brooklyn. After the two had a falling out, Mr. Lucci said, he walked away from the company and opened a shop that sold exotic cars. In the late '80s, he took a sales job with a luxury carmaker. But he never lost interest in the movie business. In 1993, he opened Automobile Film Club, using a lot from the city's Economic Development Corporation. Mr. Lucci said he worked hard to get production companies the exact vehicles they wanted and stayed on set to make sure everything worked.
Over time, his business grew to 350 cars and 14 full-time employees, mostly secretaries and mechanics. The company survived the long drought after 9/11, when the mayor's office stopped issuing film permits. Mr. Lucci said a $45,000 S.B.A. loan helped him get by and has been paid back. In 2008, his best year, the business grossed $1.8 million.
The next year, his contract for the lot ended. Unable to find a large, affordable parcel for his fleet, Mr. Lucci downsized, buying one 10,000-square-foot lot and renting another. He sold hundreds of cars. The payroll dwindled to him and his wife. During Hurricane Irene in 2011, Mr. Lucci said, 30 of his cars were damaged. Because he was carrying only liability insurance on his vehicles, he could not claim damages. The S.B.A. offered him a $6,000 loan at 4 percent interest. He thought the amount was too small, so he turned it down. The following year, he said, was a struggle.When Hurricane Sandy hit, Mr. Lucci's vehicles were still insured for liability only. His office and garage were insured, as was $30,000 in equipment. But, like many business owners, he carried no protection against floodwaters or business interruption. After the storm, Mr. Lucci said, he received $5,800 for wind damage and nothing for what was destroyed by water.
THE OPTIONS Mr. Lucci has concluded he has two options. He can close the business for good, or he can borrow a lot of money and try to make another go of it. New York City has been offering emergency loans to small businesses of up to $25,000, interest-free for the first six months and 1 percent interest for the 24 months after that. The city approved Mr. Lucci for such a loan, but he said it would barely make a dent. "I couldn't even fix my office," he said. A local office of the Small Business Administration has urged him to apply for a fixed-rate disaster loan. The agency has said businesses can obtain as much as $2 million at 4 percent interest for up to 30 years. One drawback? The S.B.A. told him he would be required to have flood insurance, and Mr. Lucci fears that could cost him up to $25,000 a year. In addition, Mr. Lucci said he would have to put up the home he shares with his wife as collateral. He turns 61 in May. "I don't know how I'm going to pay it back," he said. "I'll finish paying when I'm 90. I might not be here."
He knows that some businesses that get disaster loans end up defaulting - according to the S.B.A., the government wrote off $153 million, or nearly 2.5 percent, of the $6 billion in loans made after Hurricane Katrina. If the Automobile Film Club is one of those businesses that never rebounds, he knows he could lose everything.
"I want to leave something to my family," he said. "What if I lose my house if something doesn't go good?"
QUESTIONS:
From the obvious idea of getting more insurance, how could Lucci have managed risks better? Be sure to address the idea that Lucci had lost money during 9/11 which was also an unexpected occurrence.