Many small businesses in Texas are in the process of addressing the damage from the historic and unexpected February winter storm. It is likely many owners already are assessing building and structural damage, costs associated with business interruption, loss of inventory, and damaged equipment.
And while the damage may feel isolating for many, there is help available for small businesses if you know where to look.
Federal Emergency Management Agency (FEMA)
"FEMA's response to the crisis caused by the winter storms in Texas has been phenomenal," says Trey Taylor of Taylor Insurance in Atlanta.
The disaster declaration under FEMA initially covered 77 counties and was later expanded to 108 counties, covering nearly half of Texas. You can enter your zip code to determine if your area is covered under the disaster declaration.
Before applying to FEMA, Michael Hamelburger, CEO of The Bottom Line Group, a cost reduction company in Baltimore, encourages applicants to "take photos and have receipts of everything and list all the damaged items and parts of your business."
After completing these steps, small business owners should contact their insurance company.
To make the process more efficient, Taylor advises his clients to immediately file insurance claims and apply through FEMA's Disaster Assistance Program. But don't plan to ask for FEMA assistance and submit an insurance claim. "FEMA will not cover losses covered by insurance," he says.
You can apply online at disasterassistance.gov or by calling 1-800-621-3362. Applicants should have their social security number, contact, damage, and insurance information readily available.
The Small Business Administration (SBA)
The Virtual Business Recovery and the Virtual Disaster Recovery Center provides personal assistance to small business owners. Visit them online, or call 1-800-659-2955 to find out if you qualify to receive aid.
The loans can be used to replace or repair equipment, machinery, or damaged or destroyed real estate. Money from these loans can also be applied to make improvements to minimize damage from any future freezes.
Under the SBA, small businesses may be eligible for a business disaster loan or economic injury disaster loan. Here's what each covers:
- Business Disaster Loans. These loans are eligible for any business size. They are available to repair damaged property owned by the business and include real estate, inventory, supplies, machinery, and equipment. The interest rate starts at 3% or 6%, depending on credit available elsewhere. The loan limit is $2,000,000.
- Economic Injury Disaster Loans. These loans help small businesses, small agricultural cooperatives, small businesses in aquaculture, and most nonprofit organizations of all sizes. The interest rate starts at 2% or 3%. The loan limit is $2 million, but SBA can limit the actual amount depending on economic injury.
Business owners may also be eligible for the refinancing of existing liens or mortgages on real estate, equipment, and machinery.
Taylor emphasizes that these "programs can get complicated very quickly because there are a lot of variables, so it's important to talk to an SBA or FEMA representative about your specific situation."
The Texas Governor's office has additional resources for small businesses on their website.