Is Your Business Prepared to Survive a Natural Disaster?

Hurricane Harvey flooding in HoustonNatural disasters can happen anywhere and at any time. Over the past several weeks the headlines have been dominated by three monster hurricanes and a 7.1 earthquake in Mexico.  If they’ve taught us anything, it’s that there’s no such thing as being over-prepared, and that goes for your business too.

Hurricane Harvey dumped record rainfall along the Texas and Louisiana coasts and the cleanup is expected to take months.  And the financial impact of the monster storm will undoubtedly be felt for even longer in the greater Houston area.  According to a recent marketwatch.com article, the Small Business Administration’s disaster relief program had received 2,117 applications for assistance from residents and businesses affected by Hurricane Harvey as of September 1.

Unfortunately, the SBA estimates that about 25 percent of small businesses that close due to a natural disaster never reopen.  The Federal Emergency Management Agency (FEMA) puts that number even higher, at around 40 percent. And for businesses that do reopen, the road to recovery is usually long and expensive.  The problem for most is the lack of a disaster plan. Here are three things you can do to make sure your business is able to get up and running again in the event it’s affected by a natural disaster.

Be Proactive Concerning Your Finances

Don’t assume that your bank and credit card companies will know that you’ve been affected by a natural disaster.  Instead, you should contact your lending institution immediately and let them know about the emergency situation. Most lenders will work with you to help you get back on track.  In some cases, they may waive fees or allow you to defer payments.

Low-Interest Disaster Relief Financing

As mentioned earlier, the SBA offers disaster relief for small businesses. One program provides loans to help businesses recover from property damages.  The program offers terms of up to 30 years, and interest rates of 4 percent or lower.  Another SBA program helps businesses recover from economic injury and provides loans of up to $2 million to help with expenses you would have been able to cover had you not been affected by a natural disaster.

Some lenders also offer special programs for new and existing customers affected by natural disasters.  At American Receivable, we’re offering discounted rates to businesses affected by Hurricane Harvey.   Our invoice factoring solutions require no lengthy approval process and funding in as little as 24 hours. Call 1-800-297-6652 or in the Houston area call 281-442-7000 to learn more.  You may also click here for more information.

Prepare for the Unexpected

As the old saying goes, “an ounce of prevention is worth a pound of cure.” Having cash reserves to meet your operating expenses for at least 30 days can help your business survive a natural disaster.

Unfortunately, this is easier said than done for small businesses that operate on tight margins.  If this is true for your business, now is the time to look for ways to pay off your existing debts and reducing your operating costs and put that money in a safe, interest-bearing account so it will be there in the event of a natural disaster.

For more information, check out these helpful disaster checklists and tips.