On the evening of Tuesday, October 10th, Hurricane Michael entered the state of Georgia as a Category 3 hurricane.  According to the National Weather Service, “Hurricane Michael was the strongest hurricane on record to make landfall along the Florida panhandle as well as the first major hurricane (Category 3+) to directly impact Georgia since the 1890s.”  The system retained wind gusts of 70 mph in central Georgia through the evening and exited the state on the morning of October 11th as a tropical storm, leaving in its wake a wide path of devastation across most of southwest Georgia and parts of central Georgia.  Due to the severity of the damage, following on the heels of Hurricane Florence a month earlier, which left the North and South Carolina coastal regions devasted by flooding, the SBA Disaster Assistance resources were taxed.

Even with the myriad of demands emerging from these two storm systems, the SBA responded to southwest Georgia counties within a few days.  As a small business owner, consider the three lessons learned below to better prepare, both mentally and financially, for the next disaster.  We know that it is not a question as to whether it will happen again or not, but one of when.

Lesson 1:  The first step following the disaster occurrence, prior to any SBA or FEMA response, requires a state and/or federal disaster declaration.  A Presidential Disaster Declaration mobilizes certain federal resources that specifically impact small businesses. Within this declaration, specific counties are identified, based on the assessed damage to both residential and commercial interests.  Counties are defined as Primary and Contiguous.   Primary Disaster Counties are those that have suffered the most significant damage due to the event. Contiguous Disaster Counties are those counties which share a common border with the Primary Disaster Counties.  As more accurate assessments of the damage emerge, the county designations as primary and contiguous may change.  As one would expect, as the number of counties designated as Primary Disaster Counties increases, so do the number of Contiguous Disaster Counties.

Lesson 2:  Upon delivery of the Presidential Disaster Declaration, the SBA begins to mobilize resources.  One of their first steps identifies suitable locations in the affected Primary Disaster Counties to set up an SBA Business Recovery Center (BRC).  This center is usually located within a Chamber of Commerce or University of Georgia SBDC office, someplace that has easy access to the public and is relatively safe from future hazards.  Details as to the specific addresses of SBA Assistance Centers in the affected counties can be found at this link:  https://disasterloan.sba.gov/ela/Declarations .

The BRC functions strictly to assist businesses and individuals in the area impacted by the disaster obtain additional information on financial assistance available from the SBA and to assist in processing disaster loans.  This center functions slightly differently from the FEMA Disaster Recovery Center (DRC) model.  In addition to the services provided through the SBA BRC’s, the FEMA DRC’s provide a wider range of services to assist victims of the disaster.  The center is usually held in a larger, more open facility, such as a gymnasium or community activity center.  Within the DRC are co-located individual agencies such as crisis counseling programs, housing assistance, disaster legal services, disaster unemployment, funeral services, along with FEMA representatives. The SBA usually has a similar office set up within the DRC as the free standing BRC.  So, a business seeking assistance can go to either a BRC or DRC.  The only difference between the two are the additional community services available at the DRC’s.  One implication of this difference, though, is that the DRC’s, due to the expanded services available, usually have higher traffic volume and longer wait times.

Lesson 3: The designation as to a Primary or Contiguous Disaster County becomes significant when determining what type of disaster loan funding will be available from the SBA. For qualified businesses within a Primary Disaster County, there is eligibility for both Physical Disaster Loans (PDL’s) and Economic Injury Disaster Loans (EIDL’s) for uninsured losses.  Physical Disaster Loans (PDL’s) provide up to $2 million dollars in SBA disaster loan financing, for damages to buildings and equipment not covered by insurance policies.  Economic Injury Disaster Loans provide up to $2 million in coverage for damages to revenue streams due to the disaster event. Though the SBA can waive the $2 million dollar cap for combined PDL and EIDL funding, these are only in limited circumstances. PDL funding usually is limited to applications received within a 60 to 90 day defined period following the disaster event (as stated in the declaration).  EIDL disaster loan funding availability can extend to 9 month or longer time window, depending on the event.  Within Contiguous County designations, only EIDL’s are available to assist businesses. With the exception of aquaculture enterprises, SBA cannot provide disaster loans to agricultural producers, farmers and ranchers. These individuals impacted should consider USDA financial resources (https://www.usda.gov/topics/disaster/storms ).

The more you, as a small business owner, are familiar with the process of disaster recovery by the SBA and other Federal agencies, the better prepared you can be when recovering from a major event such as Hurricane Michael.  Your business’s ability to respond and recover more quickly than others in your industry places you at an advantage to minimize the impact to your business’s cash flow and your ability to maintain your employee’s payroll, thus strengthening the resilience of your community and the state. For additional questions related to disaster preparation, response and recovery and/or general business questions, please contact your local University of Georgia Small Business Development Center (https://www.georgiasbdc.org/locations/ ).  We are here to assist in any way we can.

(Source: Mark Lupo, Business Education and Resilience Specialist)