Small Business Recovery


Last Wednesday, Hurricane Michael hit the Florida Panhandle as a Category 4 hurricane. One of the most powerful storms ever to make landfall in the U.S, the storm destroyed thousands of homes, facilities, and businesses.

Now that the storm has passed, the difficult challenge of rebuilding begins. With usually one location and limited liquid assets, small businesses are particularly at risk in the aftermath of these events. FEMA found that roughly 40 to 60 percent of small businesses never reopen after a disaster.

But there are many resources available to small businesses following natural disasters. Taking advantage of them can easily mean the difference between success and failure. So, what are the resources available to small businesses and how can you take advantage of them following a disaster?

Filing with Insurance

Flooding caused by storm-surge is generally not covered under standard commercial insurance policies. You’ll want to make sure you take photos of the damage and contact your policy provider to see what compensation, if any, you can receive through your current policy.

For those who are looking to take preventative measures prior to a disaster, consider looking into flood policies offered by the federal government’s National Flood Insurance Program (NFIP). If your business already has Flood Insurance, you’ll be able to file a claim with the agency.

Hurricane Michael Recovery Loans

Making use of interestdisaster recovery loans is a huge help following natural disasters. The Small Business Administration (SBA) offers both low-interest loans and business counseling for the communities and counties impacted.

The interest on disaster loans offered by the SBA can be as low as 3.6 percent, and they offer both Physical Disaster Loan and Economic Injury Disaster Loan options.

You’ll use a Physical Disaster Loan to repair or replace buildings and business assets damaged by the storm. An Economic Injury Disaster Loan on the other hand is for businesses that can’t meet their financial commitments on account of the disaster.

Also consider taking advantage of the business counseling offered by the SBA. They’ll be able to direct you to different resources and help formulate a recovery plan.

For those impacted by Hurricane Michael in particular, Governor Rick Scott activated the Florida Small Business Emergency Bridge Loan Program. This is great for quick and immediate access to funds for small businesses that are interest free. However the loans only range from $1,000 to $50,000 for a length of up to one year. Businesses must show that they are actively pursuing some additional source of assistance in order to qualify. =
Other aid may also be available besides these options. To find out about other forms of local relief, you should contact your local Chamber of Commerce. They will be advocating for local businesses and will have connections for resources following a disaster.

Tax Relief After Disasters

The IRS usually responds with a number of actions to help those affected. You’ll want to research extended tax deadlines and other forms of relief that are common and could apply to your business.

To contact the IRS directly, you can use their special disaster hotline at 1-866-562-5227.

Another consideration is to use a tax accountant. Many small businesses make use of quick, automated resources for their taxes like TurboTax. These are great when you’re taking care of typical tax filings. However, tax returns can start to get complicated when you start factoring in different deductions and other forms of relief from a natural disaster. Using a tax accountant who knows about natural disaster filings and procedures might save you money in the long run.

Many businesses lose paperwork and other important documents in natural disasters. If you didn’t have backups of tax related documents, simply contact the IRS and they will help you in reconstructing your records. By notifying them that your reason for doing so is because of the disaster, they’ll expedite the process and waive any user fees.

Keeping Operations Running

Every day your business is shut down you lose money and customers as they find new businesses to meet their needs. It’s crucial that you get your business back up and running as fast as possible. This means taking advantage of loans with shorter application periods and starting your recovery process as soon as it’s safe to do so.

We realize that in many cases it’s not possible to resume operations immediately. But you may be able to resume some of your operations. If possible, it’s important you do so.

As an example, let’s say you run a business that sells and fixes appliances. Your store is going to be closed for a while as you replace your inventory, repair the damage to the building, etc. But that doesn’t mean you can’t continue repairing appliances. In fact, now might be an optimal time for your repair business to lend a hand in the community. By keeping this line of the business open, you’re minimizing your losses and generating an additional line of income to help expedite your business recovery process.

Continuing Customer Outreach

The importance of social media outreach for businesses can’t be stressed enough. The same holds true following a disaster. If you are unable to resume normal operations following a disaster, it’s important you continue to engage your customers in any way possible in the interim. During this time, customers will most likely seek other options to meet their needs, which can shrink your client base and make recovering your business even more difficult. One of the easiest ways to counteract this is through social media.

Letting customers know of the situation and informing them of your intentions to re-open as soon as possible will make sure they know you are still around and haven’t closed your business.

Plus, posting about your progress will keep customers involved and rooting for your business. Maybe you just finished installing the new tile in your store or finished painting your walls. Any post will help in making sure your customers haven’t forgotten about you.

Involve Your Business in the Community

You won’t be the only one affected by the natural disaster, so getting yourself and your business involved in the community during the aftermath is a great form of outreach. Helping others is not only good because it’s the right thing to do, but it also builds a strong reputation for your business within the local community. There are all sorts of ways to lend a helping hand. You and your employees could hold a fundraiser or a supplies drive. Or you could volunteer at a similar recovery event.

Getting Back to Business

Recovering from a natural disaster is hard. There’s no doubt about it. But half the battle is understanding the right course of action to take. Take advantage of the resources available for your business in this difficult time. By making use of interestfast recovery loans, talking with free business counselors, looking into tax relief, and keeping your customer base engaged, you can make sure that a natural disaster is just minor a setback rather than the end for your small business.

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