There are many disasters that can befall a business. Fire, flood, weather damage, and even mass shooting or terrorism can strike your business. You can’t usually predict disasters, but at least you can see a hurricane coming. In the event of a hurricane, you can often buy insurance up to 72 hours before projected landfall. Quotes are available here.
If you live in a disaster-prone area, invest in a little preparation.
For example, anyone who has spent years on the coast of the Atlantic Ocean or the Gulf of Mexico is likely accustomed to hurricanes. Same as in California, where the threat of earthquakes is always present.
Before, during, or after a disaster, a state of emergency may be declared for select counties or even an entire state. This means that federally-backed low-interest loans are made available for disaster recovery. In some cases, a state may offer zero-interest loans to affected businesses. For lines of credit, disaster loans, or other working capital, see your options here.
These loans can serve as bridge financing until an insurance claim is paid. The money can help a business survive until profits are restored to a level where the loan can be repaid.
This is not free money. You must qualify for it like other bank loans, and you must pay it back. A loan committee evaluates your application. And if you want the money fast, have a few things ready.
Is there a hurricane coming? Get a waterproof bag, fill it with the following, and evacuate.
- Three years of income statements, balance sheets, and cash flow statements. If you have not been in business that long, get what you can. With these, you can apply for disaster loans.
- Insurance policies. You will want to have them handy so that you can quickly file a claim. Additionally, the policies can be pledged as loan collateral. Assets, inventory, furniture and equipment are all insurable, as is business interruption.
- Your most important customer lists, employee data, and other vital records on a portable drive.
- Bank statements.
- Finally, if you have a physical location, prepare letters authorizing trusted employees access to your premises. Laminate them and give them to these employees. That way, if authorities have an area cordoned off, they may allow someone access if they can prove they are authorized to be there.
While many of these records may be cloud-based, don’t assume that secure, or even functional Wi-Fi will be available when you get back. It may not be. For that reason, it is best to have the physical documents.
Finally, re-opening faster could be a real competitive advantage. The first stores or establishments that sell food, hardware, ice or gasoline that re-open will likely do an enormous amount of business.
A little preparation today can save your business.