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How to Secure Disaster Relief Options for Small Businesses
October 20, 2021
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How to Secure Disaster Relief Options for Small Businesses

Hurricane season ends on November 30th, but many small business owners who have been affected by these storms will still have rebuilding to do long after this date. Fortunately, if you know where to look, disaster assistance for business owners is available.

Even if you’re lucky enough to have avoided devastation, you should still research disaster assistance options. By being prepared prior to an emergency, you can better protect your business’s financial future.

In this post, we’ve compiled five tips for small businesses pursuing disaster relief. Whether your business has already experienced the devastation of hurricanes, or you simply want to be prepared for the future, these tips will benefit you.

How to Pursue Disaster Relief Options for Small Business Owners

1. Research SBA Disaster Loans

Hurricane relief for businesses is provided by the federal government through many avenues. However, the Small Business Administration (SBA) disaster loans are the most relevant to small business owners.

Usage: The SBA offers loan amounts to business owners coping from losses caused by natural disasters that aren’t fully covered by insurance. If you apply for the SBA disaster loan program, you could receive up to $2 million for the following expenses:

  • Damaged or destroyed real estate
  • Inventory
  • Machinery
  • Equipment

How to Qualify: You’ll need to confirm your eligibility, but if your business is in a declared disaster area, you’ll probably be eligible for a recovery loan.

How to Apply: If you’ve been affected by recent hurricanes, you can find information about applying for an SBA disaster loan on the SBA website. Apply online, then check your business loan application status in their helpful portal.

If you’d like in-person assistance, contact the SBA’s Disaster Assistance Customer Service Center. They can answer questions about the application, or help you find your local SBA center.

How the SBA Has Helped Small Businesses:

The SBA offers financing solutions for businesses trying to survive tough times. Here are some of the ways they’ve been able to help business owners after large storms.

  • After Hurricane Katrina, Rita, and Wilma, the SBA approved $10.9 billion in disaster loans for small businesses.
  • The SBA loaned out $2.5 billion for disaster recovery after Hurricane Sandy. The approval rate for loans after Katrina, Rita and Wilma was 45 percent. And for Sandy, the approval rate was 53 percent.
  • In 2018, Hurricane Florence affected businesses throughout North Carolina and South Carolina. Less than 7 weeks after the storm, the SBA provided more than 7,000 disaster loans.

2. Explore Economic Injury Disaster Loans (EIDL)

In some cases, your business may qualify for the SBA’s EIDL program. To qualify for this program, you must be able to prove that:

  • You own a small business, agriculture cooperative, or non-profit organization
  • Your business has suffered significant economic injury and is in a declared disaster area
  • You require financial assistance to afford operating expenses

If your business is in a declared disaster zone and has been financially affected by a hurricane or other natural disaster, it’s likely that the SBA can help your business.

In addition, the EIDL program is one of the SBA’s coronavirus response options. Because many businesses suffered financial loss due to the pandemic, the SBA is providing these loans to affected business owners.
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3. Consider Mortgage Payment Relief

Everyone needs a roof over their head, and, sadly, hurricanes greatly affect homeowners and renters. Taking care of your home should come first and getting help with that can make or break your business. The Department of Housing and Urban Development, or FHA, in many cases, will delay foreclosure, waive late fees and even allow you to defer mortgage payments.

For borrowers with non-FHA loans, all is not lost. The FHA recommends that you contact your mortgage service provider as soon as possible to explain your situation. Often, the lender will be willing to work with you to figure something out, especially in a large-scale event like Hurricane Harvey, Irma or Maria.

Understandably, you must take care of your home before you can get your business up-and-running. Hopefully, with these resources, both will be possible.

4. Apply for FEMA Financial Assistance

While it’s not strictly meant as disaster relief for businesses, FEMA grants can help you if you’re in a pinch due to natural disasters. FEMA pays out cash grants to help disaster victims with necessities like medicine and housing. Especially if you run your business out of your home, this can be extremely helpful.

5. Devise a Disaster Response Plan

Nationwide, a national insurance company conducted a survey of small businesses in late 2015. They found that 75 percent of small business owners didn’t have a disaster recovery plan. And, according to the Insurance Institute for Business & Home Safety, 25 percent of small business do not reopen after a major disaster.

No entrepreneur would start their business without having at least some type of a plan. Yet, most small business owners don’t have a plan in place that could potentially save their business.

To start, check out free resources published by The National Fire Protection Agency (NFPA). On their website, you can find a variety of information related to emergency preparedness. This will help you make a reliable disaster recovery plan for your business.

6. Backup Important Information

Backing up your business information doesn’t cost much, and it can save you significant time and money in the event of a disaster.

With affordable, secure digital storage now available, there’s really no excuse to not have information backed up. Invoices, tax information, contracts, and other important documents should all be digitally stored in one form or another. Google DriveDropbox, and Box can all work as a business information repository.Disaster-Relief-Options-In-Text

Next Steps: Be Prepared

Don’t procrastinate on making emergency preparations for your small business. Even if you believe that your business won’t be affected by a natural disaster, you never know what could happen.

Do you have any other disaster relief tips for business owners? If so, share your suggestions with us in the comment section below.

Editor’s Note: This post was updated for accuracy and comprehensiveness in October 2021.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected].