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How Do I Recover From a Business Disaster?

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Question: How Do I Recover From a Business Disaster?
When a disaster like Hurricane Sandy hits, businesses as well as homes are hit. Having a
Answer:

Business Disaster Recovery
Of course, the best disaster recovery option is to have a disaster recovery plan in place before you are hit with a disaster. But if you don't have a plan, there are still some things you can do to get back to work and recovery financially from the disaster.

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Getting disaster assistance from the Federal Emergency Management Agency (FEMA)
You can apply for disaster assistance if your business is in an area that has been declared a "disaster area." If your county has been hit with a disaster like a hurricane, tornado, fire, or other, you must be in a "declared" disaster area to receive aid; usually the disaster declaration is by county within a state. Read more here on the FEMA website about declared disaster areas. Click on your state then see if your county is listed.

While FEMA does not specifically assist businesses, you may be able to get FEMA help for your business. You can find a Disaster Recovery Center to see what help might be available to your business.

You can Apply for disaster recovery assistance from the Small Business Administration
The SBA can help with recovery loans to small businesses through their disaster loan process. The loans can be used to "repair or replace real estate, ... machinery & equipment, inventory and business assets that have been damaged or destroyed in a declared disaster." There are several points you should note about SBA disaster loans:

  • The business must be in an area that has been officially declared a disaster (usually this is county by county).
  • The SBA loans are only for uninsured losses. If your business property is covered by insurance, it can't be part of an SBA disaster loan.
  • The SBA loans are not used for business interruption losses (losses because your business could not operate for a period of time after the disaster). You can apply for an Economic Injury Disaster Loan for working capital.

The SBA now allows you to use an online application process.Read more about SBA disaster loans on this Fact Sheet for Businesses.

Data recovery and records recovery
If your company's computers crashed or were affected by a disaster like Hurricane Sandy or by a data loss, you can hire a data recovery service who may be able to restore your data. Search on "data recovery" and you may be able to find a local company or online service.

When you are getting ready to file your business income taxes, you can use the IRS 584Bto help you account for losses to business property.

Business insurance for recovery
Contact your business insurance company and see what your insurance policy might pay for. Business insurance often includes business interruption insurance to help you pay bills while your company is out of commission, in addition to insurance on business property, equipment and other assets. If you have a home based business, you may be able to get some coverage from your homeowner's insurance policy.

Before the next business disaster
Business disasters come in many forms, from computer outages to physical disasters like hurricanes, floods, and fires, to personal threats. So, how can you protect your business now, before the next disaster hits?

Read more about protecting your business before and after a disaster

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