Forest fires, floods, tornadoes, hurricanes, derechos, or pandemics wreak havoc on local economies. For entrepreneurs, the effects can feel like they are multiplied because a natural disaster that impacts a local business is more likely to have affected the owner’s home as well. Just like homeowners, businesses with a physical space are required to carry property insurance, but the insurance doesn’t pay because the damage is caused by a natural disaster? In these situations, agencies like the Federal Emergency Management Administration and the Small Business Administration can provide assistance in the form of housing, medical, and SBA loans.

Typically when people think of the SBA, they think of the 7(a), 504, and microloan programs, but the agency has disaster relief programs as well. Small businesses, farms, and non-profits located in regions have been declared a federal disaster area by the US President can apply. These loans can be used to cover costs that insurance companies do not – including physical repairs, property and inventory loss, economic injury, and equipment damage. Applications for these SBA loans are online, and there is a lot of documentation required, so it is always helpful to visit a local SBA office for guidance.

Since many business owners live near their business and have employees that might also need help, understanding FEMA programs for individuals is helpful as well. These programs can help when housing has been deemed unlivable (for both homeowners and renters) as well as clean-up and repairs. FEMA will also assist with any damage to vehicles, household items, educational materials, and tools required for your job. Finally, they can help with moving, storage, child-care and medical expenses.

Business owners can also prepare for disaster by adhering to several best practices for accounting and record-keeping. First, ensure there are electronic (ideally cloud-based) records of financial and tax records. Second, keep detailed records of equipment, including serial numbers, purchase price, and location so this information doesn’t have to be located after a disaster strikes. It can also be helpful to establish a relationship with a local SBA office in case they can help smooth the process of using these documents to help apply for SBA loans if they are needed.

Finally, living through a natural disaster can be scary but if a small business is located in an area that is prone to flooding, tornados, or other seasonal events, it is very helpful to have a disaster management plan in place. With a written plan, if the worst happens, the business owner and employees can all be prepared for what comes next.