As nationwide protests against the killing of Black Americans by police engulfed the country this summer, many small businesses found themselves in the crosshairs of conflict. Pockets of looting and destruction left behind shops with smashed windows and damaged merchandise, and owners wondering who would foot the bill.
It's unclear just how extensive the losses are at present. A preliminary estimate from insurance industry analysts as of June 4 put the range of covered losses between $500 million and $900 million. Should things continue at this pace, the cost of this year's incidents of civil unrest could rival that of the Rodney King riots, which occurred April 29 to May 4, 1992, in Los Angeles. That unrest caused $775 million in insured losses, or about $1.4 billion in 2020 dollars, according to Property Claim Services, a unit of Jersey City, New Jersey-based data analytics firm Verisk Analytics.
Even if a protest doesn't turn violent, they can take their toll on U.S. businesses. Case in point: In July, after several nights of protests--which were mostly peaceful--downtown Portland, Oregon, turned into a no-go zone and shop owners preemptively boarded up store windows and doors. The pandemic was also to blame, but abandoned streets didn't help matters.
While riot-inflicted damage to a physical structure--like a storefront--is typically covered by business owner policies, or BOPs, each claim is different and insurers may not cover all damages. Some businesses may not have been insured to begin with. Help is available, however: The U.S. Small Business Administration is offering low-interest loan programs to businesses with collateral damage--physical or otherwise.
Businesses that need to rebuild and are located in seven states may now access two types of disaster loans through the SBA. The loans--which could be a Business Physical Disaster Loan or an Economic Injury Disaster Loan (EIDL)--are capped at $2 million and come with 30-year repayment terms and interest rates as low as 3 percent. The SBA notes that loan amounts and terms are set by the organization and are based on each applicant's financial condition. The loans can be used for working capital and daily operating expenses and, especially in the case of civil unrest, to replace damaged property.
The latter of the two programs is unrelated to the Cares Act, which allowed companies impacted by the pandemic to seek federal aid, regardless of whether they were based in a declared disaster zone. Businesses don't need to have suffered any physical property damage to access the EIDL. What's more, even if your business already received a Cares Act EIDL, you can apply for this loan.
To be eligible for either program, companies must meet SBA size guidelines and have a location in a SBA-declared disaster area. Additional credit standards may apply. Below is a list of affected areas, along with application deadlines.
Pennsylvania
Counties affected: Philadelphia, Bucks, Delaware, and Montgomery
Date of damages: May 30 to June 8, 2020
Type of loans: Business Physical Disaster Loan or EIDL
The filing deadline for physical property damage is October 6, 2020. The deadline to return economic injury applications is May 7, 2021.
New Jersey
Counties: Burlington, Camden, and Gloucester
Date of damages: May 30 to June 8, 2020
Type of loans: Business Physical Disaster Loan or EIDL
The filing deadline for physical property damage is October 6, 2020. The deadline to return economic injury applications is May 7, 2021.
Minnesota
Counties affected: Hennepin, Anoka, Carver, Dakota, Ramsey, Scott, Sherburne, and Wright
Date of damages: May 27 to June 8, 2020
Type of loans: Business Physical Disaster Loan or EIDL
The filing deadline for physical property damage is October 2, 2020. The deadline to return economic injury applications is May 3, 2021.
South Carolina
Counties affected: Charleston, Berkeley, Colleton, Dorchester, and Georgetown
Date of damages: May 28 to June 30, 2020
Type of loan: EIDL
The deadline to return economic injury applications is May 17, 2021.
Illinois
Counties affected: Cook, Dupage, Kane, Lake, Mchenry, and Will
Date of damages: May 27 to June 8, 2020
Type of loan: EIDL
The filing deadline for physical property damage was August 24, 2020. The deadline to return economic injury applications is March 23, 2021.
California: Alameda, Los Angeles
Counties: Alameda, Los Angeles, Contra Costa, Kern, Orange, San Bernardino, San Francisco, San Joaquin, San Mateo, Santa Clara, Stanislaus, Ventura
Date of damages: May 27 to June 8, 2020
Type of loans: Physical Disaster Loan or EIDL
The deadline to apply for property damage was September 16, 2020. The deadline to apply for economic injury is March 17, 2021.
California: San Diego, Sacramento
Counties: Sacramento, San Diego Amador, Contra Costa, El Dorado, Imperial, Orange, Placer, Riverside, San Joaquin, Solano, Sutter, and Yolo
Date of damages: May 27 to June 8, 2020
Type of loan: EIDL
The deadline to apply for economic injury is April 7, 2021.
Washington
Counties: King, Chelan, Kitsap, Kittitas, Pierce, Snohomish, and Yakima
Date of damages: from May 26, ongoing
Type of loan: EIDL
The deadline to apply for economic injury is June 16, 2021.
You can apply for a disaster loan through the Small Business Administration's website.
