Small Business Administration’s disaster loan program
SBA disaster loans help account for losses not covered by insurance or by the Federal Emergency Management Agency. These include losses the business could have covered if the disaster had not occurred.
The types of loans that are available include:
- Physical damage loans, which cover the repair and replacement of physical assets.
- Economic Injury Disaster Loans, which cover operating expenses after a disaster.
- Mitigation assistance, which provides funding to make improvements that protect against future damage
Business owners can visit the SBA’s website to see if they are eligible.
The loans have 30-year terms at rates not to exceed 4%. The first year, though, carries zero interest as well as deferred payments for a year after the loans are disbursed. There are no prepayment fees or penalties.
But the agency requires collateral for loans of $50,000 or more, with real estate as the preferred collateral. Loans of $200,000 or less will not require the business owner to put up their primary residence as collateral if the owner has other assets of equal value to or greater than the amount of the loan.
The terms now are improved from previous years, after the SBA took action last year to expand eligibility, boost dollars for mitigation and extend deferment for small businesses.
Florida Small Business Emergency Bridge Loan Program
For small businesses in Florida specifically, these short-term, interest-free working capital loans are intended for businesses to help cover the gap between when a disaster hits and when it has secured longer-term recovery measures, such as federal disaster assistance or insurance payouts.
It’s not intended to be a primary source of assistance. Businesses must be established and have 100 employees or fewer, be located in Florida, and have been physically or economically damaged by a disaster. The maximum loan is $50,000 for a term of up to one year.
Department of Labor’s Disaster Unemployment Assistance
Business owners whose physical workplaces have been damaged because of a natural disaster may want to direct their employees to the Department of Labor’s Disaster Unemployment Assistance program. It’s available to any worker scheduled to work in the area at the time of the disaster who can no longer work there because, thanks to damages from a storm, they cannot reach their place of work.
The DUA begins with the first day of the week following the date the major disaster began and continues for up to 26 weeks after the date the president officially declared the event a disaster. The maximum weekly benefit amount payable is determined under the provisions of state law for unemployment compensation in the state where the disaster occurred. However, the minimum weekly benefit amount payable is half of the average benefit amount in the state.
To file a claim, individuals who are unemployed as a direct result of a disaster should contact their state unemployment insurance agency.
$10,000 grants from the Restaurant Disaster Relief Fund
Small-business owners that have been affected by a natural disaster are eligible for a $10,000 grant through a partnership between DoorDash Inc. and small-business platform Hello Alice.
To be eligible, a business must operate in the restaurant industry and have between one and three brick-and-mortar locations, $3 million or less in revenue per location, and fewer than 50 employees per location. Businesses also must be experiencing hardship because of a state or federally declared natural disaster.
Applications close Dec. 2. Recipients will be announced in April.
Free mentoring from SCORE
SCORE is a free mentorship program supported in part by the SBA that pairs business owners with experts in their fields. SCORE also offers online courses and webinars.
IRS often extends tax deadlines in disaster areas
Businesses and individuals with an IRS address of record in areas covered by FEMA disaster declarations may be given extra time to file. Business owners can check the IRS website to find out whether they are eligible for an extension.