Businesses hit by Hurricane Florence can borrow up to $2 million from the U.S. Small Business Administration to do everything from replace or repair damaged machinery, property and help cover other operational losses.
The storm in North and South Carolina has already caused roughly $44 billion in damage and lost economic output, Moody’s Analytics told media outlets. It could rank among the nation’s 10 costliest hurricanes if the projection is precise. The economic research firm added that the estimate is preliminary and could move higher or lower. Florence has caused major damage to businesses and homes, including flooding problems.
Homeowners can get loans up to $200,000 to repair or replace disaster damaged or destroyed real estate. Homeowners are eligible for up to $40,000 to repair or replace disaster damaged or destroyed personal property.
At the same time, small business owners may have to seek loans to help recover because they often are not sufficiently prepared or insured to endure losses from ruinous events like Florence. Roughly four in 10 small businesses struck by a natural disaster are forced to permanently shut down, the Federal Emergency Management Agency reports. And the median cost of downtime from a small business affected by an extreme weather event is $3,000 per day, a 2013 study by the national advocacy group Small Business Majority shows.
The study reveals some 57% of small businesses have no disaster recovery plan. Additionally, for small businesses that do have continuity or risk management plans, 90% spend less than one day a month preparing and maintaining them.
“Small businesses typically are not adequately insured,” says Carol Chastang, (Acting) Deputy Press Director/Team Lead at the SBA.
“They often lack the resources, particularly in terms of capital and staff—that large corporations have at their disposal. For instance, a large company can designate a team to manage their organizations business continuity planning. A small business owner is typically concerned about the bottom line, marketing their product, and often has neither the time or the money to spend on business continuity planning.”
“On the other hand, there are many things a business owner can do (like storing important documents in the cloud, establishing a solid supply chain, developing a crisis communications plan) that’s either free or very inexpensive, and will go a long ways towards helping that business become more resilient. The SBA is there to help business of all sizes, homeowners, renters, and private nonprofits cover losses that aren’t fully covered by their insurance.”
The SBA has a partnership with the Insurance Institute for Business and Home Safety to promote business continuity and to encourage businesses and homeowners to rebuild stronger, Chastang says.
The IHSB is a nonprofit whose mission is to conduct objective, scientific research to identify and promote effective actions that strengthen homes, businesses and communities against natural disasters and other causes of loss, according to its Facebook page.
Chastang says the IBHS provides great tools to help businesses make smarter decisions regarding insurance. She added the business owner should consult with an insurance professional to determine the appropriate coverage for their organization.