Natural disasters such as earthquakes and hurricanes can strike at any time, and have an upsetting effect on communities and small businesses. Despite the fact that you may be ready to reestablish your small business after a natural disaster, there are some important steps that you need take to offer your small business the best possible chance of recovery after hurricane.
For small business owners, government firms such as the Small Business Administration (SBA) have been offering disaster relief programs to victims of Hurricane Irma. In line with the MarketWatch, the SBA had received applications for loan from residents and businesses affected by hurricane.
Regrettably, not all small businesses are able to recover after the Hurricane Irma; almost 75% of small businesses don’t have a disaster plan. According to the Federal Emergency Management Agency (FEMA), almost 40% of small businesses don’t reestablish after the hurricane because of the considerable cost of damage repairing. Despite the fact that the small business does reestablish, 52% of small business owners say it might take almost three months to recover.
Nobody can forecast a natural disaster; however there are some safety measures that you can take. Here are three things that your small business can manage at present to prepare for a natural disaster and get back up and running quickly:
Connect With Your Lender
Contact your lender or primary bank where you have credit, and allow them to understand about your emergency situation. Mostly, lenders and banks will work with you to defer payments and remove costs until your business gets back on the track. Following the hurricane Irma and Harvey, most of the lenders have agreed to work with small businesses in the damaged areas to defer collecting payments after the hurricane hit.
Find Low-Interest Disaster Loans
The SBA has two types of funding programs to help sufferers of hurricane Irma and Harvey. One type of funding is for physical damages with terms of up to 30 years and interest rates up to 4%, and the second funding program is for the financial damages, which covers costs you’ll have been able to pay before the disaster struck. Small businesses can borrow up to $2 million with these disaster loans. But wait! There is one more loan program provided by the U.S. Department of Agriculture to help the entitled ranchers and farmers to rebuild from losses due to disaster.
However if you don’t make the grade for a disaster loan, or are in dire need of a short-term working capital, there are so many funding options available at present in the market. Line of credit is an instant way to acquire working capital for whatever emergencies you are experiencing.
The advantage of a line of credit is that it’s a fixed amount, and in general, you are not required to apply the finances until you need them, and it will not accumulate interest in the interim.
Savings Can Help
Having a cash reserve to carry on with the worker wages and expenses is vital because it takes time to complete the insurance claims and undergo the process of repairs. Have at least 30 days’ worth of savings to cover your charges.
Carry out a cash flow projection so that you will get some help to prevent upcoming financing shortage and have a better idea of how much amount you’ll need to save. It is also suggested to secure and organize your financial paperwork. Consider rearranging your budget to reduce the overhead costs, pay off the loans, and minimize existing debt to free up more cash for unforeseen emergencies.
Keeping your small business running after a natural disaster like hurricane Irma and Harvey is essential, but the protection of you and your team of workers is most essential.
FEMA is another spot to look for help after a natural disaster like hurricane Irma or Harvey. If you are affected by hurricane, go to FEMA and SBA website where they offer safety tips and checklists for natural disasters.