The flooding that hit the Philadelphia region earlier this month impacted hundreds of small businesses. If you’re one of those business owners and you’re still struggling to recover, here’s what you need to do.
The first thing is to immediately contact your insurance carrier. Insurers such as the Hartford, Hiscox and Travelers have dedicated portals on their websites for getting insurance claims processed. But sometimes insurance coverage isn’t enough. And for those circumstances, there are other places to get the aid you need.
The most significant source of funding is through the federal government, and that aid comes from two places: the Federal Emergency Management Agency (FEMA) and the Small Business Administration (SBA).
If your business is in Bucks, Chester, Delaware, Montgomery, Philadelphia, and York Counties, as well as parts of New Jersey and Delaware, you should immediately register online with FEMA or call 800-621-3362 (800-621-FEMA. FEMA’s disaster assistance teams will help you submit applications for federal assistance, check the status of an application already in the system, or assist in making minor changes to applications as well as provide civil rights and disability integration information to ensure equal access to FEMA programs.
“Assistance from FEMA can help those affected by a disaster take care of necessary expenses and serious needs that cannot be met through insurance or other forms of assistance,” MaryAnn Tierney, FEMA Region 3′s regional administrator, said in a statement.
FEMA’s services to small businesses and their employees include providing additional unemployment benefits for those who are not eligible for regular state unemployment insurance, crisis counseling, legal help, and additional assistance to individuals and families who have lost their homes as well as helping with other needs such as disaster-caused child care, medical expenses, or clean-up items.
SBA disaster loans
The SBA has three loan programs that are available for small businesses affected by Hurricane Ida between Aug. 31 and Sept. 5 and located in federally declared disaster areas that include Bucks, Chester, Delaware, Montgomery, Philadelphia, York, Adams, Berks, Cumberland, Dauphin, Lancaster, Lehigh, and Northampton Counties in Pennsylvania as well as Burlington, Camden, Gloucester, Hunterdon, Mercer and Warren Counties in New Jersey. Businesses located in Delaware’s New Castle County are also potentially eligible.
The first SBA program is for business physical disaster loans. These are loans for as much as $2 million to businesses and can be used to repair or replace damaged property owned by the business, including real estate, inventories, supplies, machinery and equipment. Businesses of any size are eligible. Private, nonprofit organizations such as charities, churches and private universities are also eligible. The application deadline for these loans is Nov. 4, 2021.
The second is the Economic Injury Disaster Loans program. This provides as much as $2 million in working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, nonprofit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met due to the disaster. These loans are intended to assist through the disaster recovery period. Applications must be submitted by June 10, 2022.
Finally, the SBA provides home disaster loans of as much as $40,000 to homeowners or renters to repair or replace disaster-damaged real estate and personal property, including automobiles. This program can be leveraged by both small-business owners and their employees. The application deadline for these loans is also Nov. 4, 2021.
Business owners and their employees should know that this is not free money.
The government will require proof of a credit history that’s “acceptable to the SBA” as well as proof of the ability to repay the loans and a collateral requirement — such as real estate or other assets — for loans of more than $25,000. Interest rates can be anywhere from 1.5% to 5.7%, with lower rates offered to those who are unable to get credit elsewhere. Loan terms can be anywhere from seven to 30 years.
Applicants may apply online, receive additional disaster assistance information and download applications at disasterloanassistance.sba.gov/ela.
New Jersey grants
Other than providing help to secure federal assistance, neither Pennsylvania nor Delaware is providing additional funding for businesses affected by the storm. However, New Jersey has opened up a grant program targeted at local small businesses through the state’s Economic Development Authority that will provide as much as $5,000 in short-term, immediate rent or mortgage reimbursement support to both businesses and nonprofits with as many as 50 employees that suffered physical or flooding damage from the storm.
“We needed to act quickly to assist small businesses” impacted by the storm, said the state’s Senate president, Stephen Sweeney. “With many businesses still on the brink of closure due to the financial impact of the pandemic, without assistance the storm damage could push them over the edge. These grants will provide a critical lifeline to small businesses and nonprofits around the state.”
And, finally, the IRS is offering relief to impacted businesses across the region in the form of time. The tax agency is extending the deadline to file various federal and state tax returns in any area designated by FEMA as qualifying for individual or public assistance. More information is available at the IRS.gov disaster relief page.
Gene Marks is a certified public accountant and the owner of the Marks Group, a technology and financial management consulting firm in Bala Cynwyd.