Hurricane Irma in Florida and , which was battered by Hurricane Harvey in Texas wiped out many businesses in those states. The SBA has posted a list on its website of the counties in Florida where small business owners are eligible for SBA Disaster Loans and Economic Injury Loans. The agency has a similar list available for the Lone Star State.

Businesses can borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets through the SBA's Disaster Loan program. The agency can also provide funding for to help companies with the cost of improvements to protect, prevent or minimize the same type of disaster damage from occurring in the future.

Economic Injury Disaster Loans can provide up to $2 million of assistance to small businesses that suffer substantial financial injury as a result of a disasters such as hurricanes, earthquakes, and wildfires, which have devastated a large section of the western United States. What's great about these loans is that the interest rates for SBA Disaster Loans can be as low as 2.5 percent.

However, disaster loans can be a disaster for some companies if they need money in a hurry. Some firms may opt for other types of small business loans.

Because the government is involved, there are often hoops and loops to go through in order to receive funding. To be considered for disaster assistance, survivors must first call the Federal Emergency Management Agency at (800) 621-FEMA (3362).

Anyone who has dealt with a government agency can attest that they adhere to stringent rules and seem to take longer than necessary to do everything. Securing a disaster loan can be a disaster in itself. FEMA often takes a long time to process requests, and this slows down the process for people who desperately need financial assistance quickly.

Another challenge is lost paper work. Government agencies still operate by the old fashioned paper chase. Things become chaotic after a catastrophe, and the volume of requests complicate the process. FEMA and other entities have good intentions, it's the execution that can be frustrating.

My advice is to ensure the next natural disaster is less devastating financially by taking several measures in advance.

Store documents on the cloud

Many businesses keep their most sensitive information in house, either on an individual computer or on a shared internal server. However, if you have a ground level (first floor) business that becomes flooded by several feet of water, you could lose your financial data. Applying for an Economic Injury loan can be difficult if you cannot provide recent documents that illustrate how much revenue you are losing as a result of a natural disaster.

By storing the information on the cloud, small business owners can save themselves a lot of headaches and heartaches. An ounce of prevention is worth a pound of cure. The best way to plan disaster recovery is to store data electronically.

Prepare financially for disasters

Have enough money in your bank account that can be available on a rainy - or historically stormy - day. If possible, have six months' worth of reserve cash in your coffers. Before disaster strikes, open a business line of credit that you can tap into when problems arise. It's like a low cost insurance policy for your company. This is sound advice for businesses, as well as consumers. Don't get caught without access to money.

Learn where to go for assistance

Even the best preparation may not be enough for businesses in some places, such as the Florida Keys, where the damage seems to be the most severe. The SBA publishes a list of contacts in various states who can assist with the filing of SBA disaster loans.

Published on: Sep 25, 2017
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