Financing

Leaders need to maintain an understanding of the economic conditions of community businesses and advocate for programs that might offer solutions. Encourage all businesses, regardless of size, to have continuity plans. Evaluate how the professional community can support those efforts.

Consider This:

FEMA does not offer business assistance. Look for local resources to fill the gap before SBA arrives, or to provide additional flexibility to federal programs. 

In the Fond du Lac, WI, program referenced earlier, the funds were available and announced to the business community within a week and the first loan was made within 8 days. As more needs were identified, access to larger amounts were orchestrated through the Department of Commerce and USDA Rural Development. 

In Gays Mills, WI, the Lion’s Club purchased gift cards from locally owned businesses, and gave them to the residents of the community. This helped drive traffic and purchases back into the businesses once the disaster passed.

Actions for LEARN Group

  1. Continue publicizing availability of recovery loan resources.
  2. Enlist SBDC offices, technical colleges and other business support organizations in providing disaster recovery finance counseling for affected businesses.
  3. Engage the EDA, USDA Rural Development and the SBA in discussion about the longer-term financial recovery plan.  
  4. Encourage businesses to re-evaluate their business plan and redefine themselves and their markets. Recovery steps can present opportunities to change or grow, which may help shorten payback times.
  5. Urge businesses to avoid relying on credit cards to offset losses. Such strategies unfortunately mask the cost of recovery and create a larger burden in the future.
  6. Monitor progress of businesses who utilize microloans and publicize progress when they are repaid.
  7. Keep good documentation: SBA funding requires financial statements and tax returns. Keep receipts for everything purchased during recovery. It’s especially important to document these if more than one loan source is used to avoid ‘duplication of benefits’.
  8. Publicize the stories of companies that had a continuity plan in place and recovered faster because of it.

FAQs

Are business recovery grants available? No. Federal or state disaster recovery assistance is through loans. Emergency microloans that may be available locally are smaller amounts at low interest rates. Larger, long term loans for direct or indirect damages may be available through the SBA Disaster Division.

What are indirect losses? A gas station had a booming business until traffic was diverted because of a nearby flood. For weeks, no one could go to the station, even though it was not directly affected by the disaster. This affected sales and ultimately slowed the business. It’s important to calculate these losses to help prioritize how recovery funds are allocated, and to clearly communicate that they exist.