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Disaster Preparedness

Compiled by Stace Sorrells, SBDCNet Researcher
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Flooded StreetGetting back to business after a disaster depends on preparedness planning done today. Small business owners invest a tremendous amount of time, money and resources to make their ventures successful, and yet, while the importance of emergency planning may seem self-evident, it may get put on the back-burner in the face of more immediate concerns. For small business owners, being prepared can mean staying in business following a disaster. An estimated 25 percent of businesses do not reopen following a major disaster, according to the Institute for Business and Home Safety.

The materials and resources on this Web site can help small businesses make plans to recover from financial losses and business interruption and to protect their employees, the community and the environment.

Information from the U.S. Small Business Administration

Other Sources

SBA Disaster Assistance For Businesses of All Sizes

If your business or private, non-profit organization has suffered physical damage or

your small business or private, non-profit organization of any size has sustained

economic injury after a disaster, you may be eligible for financial assistance from the

U.S. Small Business Administration. If your business—regardless of size—is located

in the declared disaster area, you may apply for a long-term, low-interest loan to repair

or replace damaged property.

Even if your property was not damaged and you are a small business owner or a

private, non-profit organization, you may apply for a working capital loan from the

SBA to relieve the economic injury caused by the disaster.

Physical Disaster Loans

Businesses of all sizes and private, non-profit organizations may apply for a

Physical Disaster Loan of up to $2.0 million to repair or replace damaged real estate,

equipment, inventory and fixtures. The loan may be increased by as much as

20 percent of the total amount of disaster damage to real estate and/or leasehold

improvements, as verified by SBA, to protect the property against future disasters

of the same type. These loans will cover uninsured or under-insured losses.

Economic Injury Disaster Loans

Small businesses, small agricultural cooperatives and certain private, non-profit

organizations of all sizes suffering substantial economic injury may be eligible for

an Economic Injury Disaster Loan of up to $2.0 million to meet necessary financial

obligations – expenses the business would have paid if the disaster had not occurred.

Interest Rates

The interest rate on both these loans will not exceed 4 percent if you do not have credit

available elsewhere. Repayment can be up to 30 years, depending on the business’s

ability to repay the loan. For businesses and nonprofit organizations with credit

available elsewhere, the interest rate will not exceed 8 percent. SBA determines

whether the applicant has credit available elsewhere.

Application Information

Businesses may apply directly to the SBA for possible assistance. The SBA will

send an inspector to estimate the cost of your damage once you have completed and

returned your loan application.

Downloadable application forms are available at:

http://www.sba.gov/services/disasterassistance/basics/howtoapply/index.html

For information about SBA disaster-assistance for businesses, call 1-800-659-2955.

Frequently Asked Questions

What information must I submit for a disaster loan?

Submit a completed loan application and a signed and dated IRS form 8821 giving

permission for the IRS to provide the SBA your tax return information.

To process your application we need current financial information such as a personal

financial statement, a current profit-and-loss statement, balance sheet and a list of

debts.

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