Superstorm Sandy has decimated some small restaurants and businesses on the East Coast. As The Wall Street Journal’s Emily Maltby points out, for business owners faced with physical damage and lost profit, recovery may be long and arduous.
Maltby shares 5 comprehensive steps to help business owners on the road to recovery.
For most small businesses, it is the employees who are the most important assets and who can most help get things back to normal. So if you haven’t done so already, call them and find out what they, personally, are up against, and offer any assistance you can. The quicker they can get their affairs settled, the quicker they can get back to work.
Do what is possible to make the business safe, sanitary and secure, even if you are planning to file an insurance claim. But make sure to document anything that you throw away or repair.
Take photographs and hold on to receipts from service companies that are helping you repair the damage. So, for instance, if your restaurant’s freezers died, don’t let the food go moldy. If your basement flooded, pump it out.
In many cases, business and homeowners may find that certain occurrences—a flood or sewage backup for instance—aren’t included in their business or home-insurance policy. Also, some owners don’t have business-interruption insurance.
For those in a declared disaster area, certain government programs can step in to help. The best way for business owners and residents to get the attention of the appropriate government agency is to register through the Federal Emergency Management Agency, or FEMA, by visiting disasterassistance.gov or calling 1-800-621-3362.
Once your information is recorded there, it will also be automatically recorded at other agencies, such as the Small Business Administration, or SBA, which provide additional disaster-help services.
One option for business owners is to apply for a disaster loan, with interest rates as low as 4%, through the SBA. The SBA’s disaster-loan program is available to homeowners, renters and businesses of all sizes for physical damage.
Small businesses and private nonprofit organizations may be eligible for economic injury disaster loans to provide working capital. Such loans can help ease pain of paying for uninsured damage, and help manage cash flow until the business is back to normal.
How to Apply
The SBA mails applications to those individuals and business owners who register through FEMA. But the applications are also available online and at disaster centers.
An applicant needs to be in a designated disaster area, have satisfactory credit and be able to demonstrate repayment ability. It takes 10 days to be approved or declined.
Applicants need to file within 60 days of the disaster-area declaration. The government recommends applying for a loan that accounts for all damage, including whatever may be insured.
Once the insurance claim is settled, that money can go toward paying down the loan.