When Natural Disaster Strikes

A few weeks ago, Charles posted a blog, “Emergency Planning for Small Businesses,” which contained excellent advice on how to help protect your business from a life-altering disaster like a fire, tornado or flood. He’s absolutely right—an ounce of prevention is worth a pound of cure, especially when it comes to your livelihood.

As we’ve seen in the past week, Mother Nature’s wrath can come quickly and unexpectedly. Mass flooding of Cedar Rapids, Iowa, a tornado that killed four Boy Scouts in the western region of the same state and a massive wildfire near Chico, California, have led both of these states’ governors to declare official states of emergency.

Thousands of small businesses will be affected by natural disasters this year, and many of them won’t have taken the necessary measures to protect their physical structures. However, that doesn’t have to mean the end of the business. The U.S. Small Business Association has offered programs through the Office of Disaster Assistance since Congress passed the Small Business Act in 1953.

The SBA makes two types of disaster loans: physical and economic injury disaster loans. For a business physical disaster loan, owners can borrow up to $1.5 million to cover the cost of replacing and/or repairing damaged or destroyed real estate, inventory, supplies, machinery and equipment.

An economic injury disaster loan is for working capital available only to small businesses and small agricultural cooperatives to help them cover normal operating expenses during a disaster recovery period. These loans, which can be up to $1.5 million, are made at a 4 percent interest rate.

However, if your business is located in a state of emergency and you need assistance, the SBA says the first step is to contact FEMA at 800-621-FEMA or at www.fema.gov. This will register you for disaster assistance within the FEMA system and clear the way for getting additional help from the SBA.

Next, you can download a physical or economic injury disaster loan application at www.sba.gov/services/disasterassistance/basics/howtoapply/index.html. If you need extra help or explanation, you can call their customer service center at 800-659-2955 or e-mail disastercustomerservice@sba.gov.

Although this information can be quite important, let’s all hope you never have to actually use it! Be sure to follow the steps for disaster preparedness located at http://www.americasbestcompanies.com/blog/smallbizemergencyplan.aspx and have a safe summer.