By James Chittenden
Disaster relief funds for your business may be available under certain circumstances. Federal and state declarations set various relief programs in motion following natural disasters, pandemics, or other large scale negative economic events.
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.
Access to money
Before, during, or after a disaster, a state of emergency may be declared for select counties or even an entire state. This activates federally-backed low-interest loans 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.
For immigrant-owned businesses or credit-challenged businesses, loan options are available here.
- U.S. Small Business Administration Disaster Loan Assistance
- State of Florida Emergency Bridge Loan Program
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.
Disaster relief funds for your business are 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.
Business continuity. Get back up and running fast after an emergency. Is there a hurricane coming? Get a waterproof bag and fill it with the following.
- Three years of income statements, balance sheets, and cash flow statements. If you have not been in business that long, get what you can. Some lenders can provide loans with as little as six months of bank statements if the three years time in business cannot be met.
- Insurance policies. You will want to have them handy so that you can quickly file a claim. You can pledge policies as loan collateral. Assets, inventory, furniture and equipment are all insurable, as is business interruption.
- Have adequate insurance. If a hurricane is heading your way, insurance will not be available for purchase 72 hours or less before expected landfall. However, you can insure almost anything; inventory, loss of revenue, loss of key personnel, fire, flood, and the list goes on. If you are unsure of what insurance to buy, get opinions from at least three insurance agents. Remember, insurance agents work on commission, so they have a vested interest in selling you as much insurance as possible. Get information from three different sources and insure according to what makes sense for you. Get fast, free quotes here. Preserve your most important customer lists, employee data, and other vital records on a portable drive.
- Bank statements.
- If you have a physical location, prepare letters authorizing trusted employees access to your premises. Laminate them and give them to these employees. The purpose is to provide proof to civil authorities who may have cordoned off the location of the business.
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.
Business continuity. Get back up and running after an emergency. Are you ready? Take this simple and free assessment offered by the American Red Cross. There are simple things you can do to ensure your readiness.
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