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4 Financial Disaster Recovery Tips for Small Businesses

Natural disasters like Hurricanes Harvey and Irma take a toll on families, companies and governments alike, but they really take an outsize toll on small businesses. Specifically, the Federal Emergency Management Agency (FEMA) says nearly 40 percent of small businesses affected by natural disaster remain permanently closed.

In other words, a disaster recovery plan isn’t just a good idea – it literally could mean the difference between life and death for your small business.

In the wake of America’s double dose of hurricanes, many small businesses in these areas are trying to figure out how to re-open their doors. But finding the funds to do so can be difficult and stressful. The following are some some tips and resources on how small businesses can recover from a disaster, including what you can do ahead of time.

Disaster Recovery Tips for Small Businesses

  1. Talk to the SBA: The U.S. Small Business Association offers small businesses and nonprofits two different types of loans – both up to $2 million – in the event of disaster: physical disaster loans and economic injury disaster loans. The first kind can be used to repair or replace things such as real property, machinery and fixtures. The second kind, as the name implies, helps “meet the normal financial obligations that your business or private nonprofit organization could have met had the disaster not occurred,” according to the SBA.
  2. Seek Out Other Financial Relief: Even if you don’t qualify for a disaster loan, if you have good credit standing and your needs aren’t too deep nor severe, you might consider taking out a small business loan to get you back on your feet. Also, if you want to prepare for the possibility of a disaster, consider taking out a business line of credit, which only requires you to pay interest on money borrowed – a vital resource if you need it, and peace of mind even if you don’t.
  3. Build a Rainy-Day Fund: You should always be preparing for the worst-case scenario by amassing a rainy-day fund. It can be a tough task for small businesses, but a little extra scrimping and saving during good times could end up ensuring your survival after a disaster.
  4. Prepare a Recovery Plan: While most recovery tips focus on obtaining much-needed cash to help rebuild, another important aspect of getting back on your feet is being able to return to normal operations as quickly as possible. A recovery plan can help you do just that. The Insurance Information Institute outlines some of the key elements of such a plan, including setting up a communications strategy to prevent losing customers; protecting your building and keeping duplicate records.

Not sure exactly what your disaster recovery plan should look like? The consultants at McManamon & Co. can help small businesses compile a number of strategies, including how to put the pieces together after a hurricane, tornado, earthquake or other natural disaster.

Whether you’re recovering in the wake of Harvey and Irma, or you just want to make sure your small business is ready for the worst, call McManamon & Co. at 440.892.9088 or contact us online today.

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