September 19, 2017
By Bob Coleman
Editor, SBA Hot Topic Tuesday
SBA Hot Topic Tuesday — America’s SBDCs on the Front Line Helping Small Biz Hurricane Victims
Don’t forget about the free resources your local SBDC can offer to your small business customers who are facing the loss of their livelihood due to the recent hurricanes.
ASBDC President Tee Rowe tells the Coleman Report, “What we usually find in working with SBA is that only 10% of the disaster loans are small business loans, about 90% are FEMA loans.
“The reason the business loans tend to be more difficult is not the fault of the SBA, it’s just the nature of a business loan. You are trying to recreate cash flow, verify losses on equipment, and everything else. It’s more complicated than doing a basic disaster home loan, which is essentially a second mortgage when you get right down to it.
“This is where SBDC’s come in. We are sharing information with our networks in Florida and Texas trying to find the workarounds to help your clients recreate their business history to get these loans.
“And to be fair, Congress has done a bunch after Katrina to help SBA and I think they have done some great work to try and simplify the process. At the end of the day though, it is still complicated.
What are the free services provided by SBDCs?
• Help in reconstructing damaged or destroyed business records
• Business planning to help business owners re-establish their operations and plan for their future
• Assistance with updating or rewriting business plans
• Counseling for financial, accounting, marketing and other post-disaster challenges
• Assistance with accessing government contracts and procurement related to the disaster
• Management and technical assistance
Mary Peters of the South-West Texas Border SBDC network reinforces two facts:
“We would like to promote within the lending community that SBDC’s are here not just for starting or growing a business. In the case of an emergency such as a fire, flood, hurricane, or earthquake, SBDC’s are uniquely positioned to jump in and address the needs of the small business community.
“The secondary theme is getting the message out to small businesses about the process which begins with acquiring a FEMA registration number, then going to SBA for the disaster loan. The disaster loan has two elements to it, the physical damage and economic injury.
“This is an attempt to arm the small business with tools to make one of the hardest decisions of their life.
Deidre Pattillo, also from South-West Texas Border SBDC adds some grim statistics.
“40% of small businesses do not re-open after a major disaster.”
I asked, “How do we solve that? What do we need to do?”
Deidra said, “It comes down to how effective was the business before the disaster and how quickly they are able to recover, not just functionality, but their data!
“93% of businesses that lose their data centers for more than 10 days end up filing for bankruptcy. What we are seeing is that businesses that have data loss are significantly impacted even when their communities are not. If you add in the community impact in this widespread of a disaster, you can see what small businesses are facing.”
Go to the website to find a SBDC near you http://americassbdc.org/.