Frankenstorm Sandy has certainly lived up to the name that was bestowed upon her long before she came ashore in Southern New Jersey. She has relentlessly inflicted damage and destruction in her path from the Caribbean to the Northeast Coast of The United States – the most significant and visible being in the New York Tri-State area. And among those affected, small businesses will potentially fare the worst. Many small business owners were unprepared for the severity of this storm and the damage in her wake. Recent estimates from risk analysis firm Eqecat puts the total economic losses at $50 billion. In addition to the economic toll, the disruption to people’s lives due to property damage, transportation disruptions, prolonged business closures, electrical outages, injuries, and loss of life are immeasurable.
Unfortunately, the worst is yet to come for many small business owners. As you begin to assess the damage inflicted on your small business, it’s important to create a short-term and long-term recovery plan. Here are a few tips to help you access the money you’ll need to get back on your feet:
- Contact your insurer. If you have not already done so, it’s incredibly important that you contact your insurance company before cleaning up any damage to your property. Don’t throw away any damaged property until your insurance company has sent someone out to assess the damage. Most insurers have emergency staff on hand to expedite this process. For more insurance tips, check out this article.
- Contact FEMA if your business is in a federally declared disaster area. All of New York, New Jersey and Connecticut fall in this category. If your business sustained damage as a direct result of Hurricane Sandy, you will likely qualify for federal assistance. Visit the Hurricane Sandy page on their website to learn more about applying for assistance and to determine if you qualify for assistance. Keep in mind that FEMA is a long-term solution. Funds from FEMA could take weeks or months to get to you.
- Apply for a disaster loan through the SBA. According to the SBA website, “If your business or private, nonprofit organization has suffered physical damage or… 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.” Unlike most of the SBA’s loan programs, disaster loans are funded through the Federal Government. Typically, most applications take at least two weeks to process but the expected flood of applications due to Hurricane Sandy could result in slower processing times.
- Consider alternative means to access capital. While FEMA and the SBA are great long-term and mid-term capital solutions, many small businesses affected by Sandy will need cash sooner than later (like, yesterday). As a short-term solution, consider applying for financing with an alternative financing company. At The Receivables Exchange, an invoice financing online marketplace, once approved, sellers will receive cash within 24 hours of their first trade. For fast access to capital, alternative financing companies might be the solution you’re looking for.
In addition to the resources listed above, many banks are waiving fees on all of their small business bank accounts. Talk to your financial advisor to learn even more about the recovery options available to you.