It was a year ago when Hurricane Irma tore apart dealerships, storage buildings and marinas in southwest Florida and the Keys. As you read this, marine businesses in the Carolinas are bracing for Hurricane Florence and a predicted storm surge up to 13 feet, as well as disastrous flooding measured in feet.
Fortunately, dealers have had some time to heed warnings and apply lessons from Irma and Harvey. Damage seems imminent as far inland as Georgia and Virginia. Once Florence passes, what’s next?
Rohit Arora, CEO of Biz2Credit and an expert on small-business financing and financial technology, recently suggested in Forbes several ways to help businesses recover from a hurricane.
It’s given that damage from Florence will easily reach billions of dollars. According to Arora, even businesses with insurance likely won’t have all damages covered. This will be made worse by the confusion over coverage and the typically long wait to receive payment for claims determined to be covered.
“A major issue related to extreme weather events and insurance coverage — highlighted by Super Storm Sandy — was the distinction between whether damage was caused by wind or by storm surge,” Arora said. “Wind damage is generally covered in the policy, whereas storm surge or flood damage requires a rider to a policy holder’s coverage — or even a separate flood insurance policy.”
This distinction accounted for nearly half of all claims from Sandy being denied, totaling nearly $20 billion (regionally) in uncovered damage. If a business is in a flood zone, does it have flood insurance coverage?
Coverage notwithstanding, Arora points to possible recovery help from two major kinds of SBA disaster loans. For businesses impacted by natural disasters, these loans can be a lifeline. They have low interest rates and attractive repayment terms, and they can apply to various declared disasters.
For example, the SBA is providing loans for companies affected by the Kilauea eruption in Hawaii. Arora said more than $8 million in SBA disaster loans have already been approved for businesses recovering there. SBA funding can pay for repairs and replacement and/or help small businesses pay operating expenses to overcome economic injury.
More specifically, SBA’s business physical disaster loans can fund disaster-damaged property up to $2 million to qualifying businesses and non-profits. “The money can be used to fix or replace buildings, machinery and equipment, inventory and supplies,” said Arora. “In addition, businesses planning property improvements, such as installing a drainage system to help reduce the risk of future flooding, may qualify for an even bigger loan.”
SBA also offers economic injury disaster loans. “These are working capital loans to help small businesses meet their ordinary financial obligations that cannot be met as a direct result of disasters,” said Arora. “These short-term loans are intended to assist through the disaster recovery period. Funding is determined by the actual economic injury suffered and the company's financial needs, even if no property damage was sustained.”
Here are seven common-sense actions Arora recommends all businesses — boat dealerships and marinas included — should consider:
1. Check disaster declarations. The SBA has a Web page that lists areas under disaster declarations.
2. Document damage with photos and videos to accompany any claims.
3. Read your insurance policy and determine what’s covered.
4. File insurance claims quickly, as policies may require claims be filed within specific timeframe.
5. To cover expenses that insurance might not meet, consider an SBA disaster loan.
6. FEMA offers assistance with filing insurance claims, landlord issues and other problems for business operating in designated federal disaster areas.
7. Back up all records on computers.
We share a genuine concern for everyone facing Florence, and pray for unexpected favor in all ways for all those who are impacted.