2013 Florida Emergency Preparedness Association

Annual Meeting and Work Session

SBA Disaster Loan Program &

Basics of Disaster Preparedness

January 28 – February 1, 2013

Office of Disaster Assistance

Since 1953, when the SBA started making disaster loans, the SBA has approved more than $50 billion in disaster loans to over 1.9 million homeowners, renters, businesses and non-profit entities.

The SBA’s low-interest loan program was designed by Congress to enable those affected by unforeseen catastrophic events to recover with as little adverse impact as possible.

History

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History

Since 1989, the U.S. Small Business Administration’s (SBA) Office of Disaster Assistance has approved

disaster loans for over $4 billion in Florida.

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History

Last year, following Tropical Storm Debby, the SBA approved almost $22.8 million in disaster loans.

SBA’s goal is to help people recover from disasters and rebuild their lives by providing financial assistance to homeowners, renters, businesses and non-profit organizations of all sizes.

After hurricanes, floods, tornadoes, earthquakes, wildfires and other disasters, the SBA is the primary source of federal funds for long-term recovery assistance.

SBA disaster loan program features low-interest rates, generous terms and conditions, and makes recovery less challenging.

Role in Disaster Recovery

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When Are Disaster Loans Available?

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Presidential Disaster DeclarationsIndividual AssistancePublic Assistance

SBA Disaster DeclarationsAgency or Administrative (Physical and economic injury)Governor’s Certification (economic injury only)Secretary of Agriculture (economic injury only)Military Reservist (economic injury only)

Presidential Declaration for Individual Assistance

PresidentBarack H. Obama

• If the President declares a major disaster declaration for Individual Assistance, SBA’s disaster loan program is automatically activated.

• Homeowners, renters and businesses of all sizes including private, non-profit organizations are eligible to apply for their uncompensated physical losses.

• Small businesses, small cooperatives and most private non-profits of any size, can apply for working capital loans to cover their economic injury losses.

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Presidential Declaration for Public Assistance (PA)

If the President declares a major disaster declaration for Public Assistance, SBA’s disaster loan program is activated only for eligible private, non-profit organizations.

Administrative (Agency) Declaration

SBA AdministratorKaren G. Mills

If SBA’s Administrator declares an SBA only declaration (called an Administrative or Agency declaration), SBA’s disaster loan program is activated.•Individuals and businesses are eligible.•Usually a less substantial disaster.•FEMA is not involved.•There are no federal grants available.

SBA makes an agency disaster declaration for physical damagesbased on the verification of the occurrence that at least

25 homes and/or businesses that sustained at least 40% uninsured property damage.

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Differences in Presidential Versus Agency Declarations

Presidential declarations

SBA Administrative (Agency) declarations

The declared disaster area and eligibility is different.

In Primary Counties: Renters, homeowners and businesses of all sizes are eligible to apply for SBA disaster loans for physical damages. Small business and non-profit organizations of all sizes are eligible to apply for economic injury disaster loans.

In Contiguous Counties: The SBA’s economic injury disaster loan program is available. Loans for physical damages are not available to individuals or businesses in these counties.

In Primary Counties: Renters, homeowners and businesses of all sizes are eligible to apply for SBA disaster loans for physical damages. Small business are eligible to apply for economic injury disaster loans AND the same assistance is available to those in the contiguous counties.

FEMA is not involved.

There are no grants available.

Governor’s Certification

If a Governor certifies that at least five (5) small businesses in a disaster area have suffered substantial economic injury as a result of the disaster, and need financial assistance not available on reasonable terms, SBA activates its Economic Injury Disaster Loan (EIDL) program only.

Note: Physical Disaster Loans are not

available under this type of declaration

This declaration is for Economic Injury Disaster Loans (EIDL) only. The filing deadline is 9 months from the date of the declaration.

Florida GovernorRick Scott

Secretary of Agriculture Declarations (Sec-Ag)

If the Secretary of Agriculture designates an area an agricultural disaster, SBA automatically activates its Economic Injury Disaster Loan (EIDL) program.

This declaration is for Economic Injury Disaster Loans (EIDL) only. The filing deadline is 8 months from the date of the declaration.

Loans are made available to eligible small businesses, small agricultural cooperative, or private non-profits organizations that have suffered substantial economic injury as a result of the declared disaster.

Military Reservists Economic Injury Disaster Loans(MREIDL)

Eligible small businesses that are not able to meet their ordinary and necessary operating expenses because an “essential employee” is called up to active duty in their role as a military reservist can apply for an SBA Military Reservist Economic Injury Disaster Loan.

The filing period begins the date the essential employee receives a notice of expected call-up and ends 1 year after the date the essential employee is discharged or released from active duty.

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How Much Survivors Can Borrow?

Disaster loans are only for uninsured losses

HomeownersUp to $200,000 to repair/or replace primary homes

Homeowners/Renters Up to $40,000 for contents, including automobiles

Businesses/Non-ProfitsUp to $2M to repair/replace damaged business assets and

working capital loans to meet operating expenses

Note: Funds are also available for mitigation to prevent loss to real property. Working capital loans are only available to small businesses, and non-profit organizations of all sizes.

Ways to Apply for an SBA Disaster Loan

Under a Presidential Disaster Declaration, disaster victims should first register with FEMA by calling 1-800-621-3362 or visiting www.disasterassistance.gov.

In all other disaster declarations:

•Apply online at: https://disasterloan.sba.gov/ela/.•Call 1-800-659-2955, or•Visit one of the Centers in the disaster area.

Application forms are available at www.sba.gov.

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Why Prepare for Disasters

Disaster Response Plan

Basics of Disaster Preparedness

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Protect Yourself and Your Assets

Generally, it takes several years to build a successful business and hours or minutes for a disaster to destroy it.

Businesses that are unable to access their critical data for an extended period may have more difficulty recovering.

Disasters ruin businesses and create financial hardship on families.

Proper preparation allows businesses to recover quickly.

Why Prepare for Disasters

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25 percent of businesses

that close after a disaster

never reopen.

-Institute for Business and Home Safety

Why Prepare for Disasters

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While 75 percent of surveyed business owners had a plan to get employees back to work after a disaster, only 28 percent had access to an alternative office space.

― Agility Recovery

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Why Prepare for Disasters

The SBA offers the following tips to help businesses prepare for disasters:

Identify Your Needs

Determine what your operation needs to protect itself when disaster occurs. Take steps to protect your assets even if you don not own the business building.

Safety

Include an evacuation plan with routes and establish meeting places and designate staff members to do a head count to account for all employees.

Disaster Response Plan

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Insurance Coverage

Consult with a business insurance expert to advise you on the right coverage for your situation.

When buying insurance, ask “How much can I afford to lose?” It’s a good idea to know the value of your property.

Review your insurance coverage annually to make sure the policy still meets your needs.

Disaster Response Plan

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Insurance Cont.

Most policies do not cover flood damage. The National Flood Insurance Program provides this coverage. Visit www.floodsmart.gov for more information.

Consider business interruption insurance, which compensates for lost income if your company has to shut down after a disaster.

Alternative Work Space

Consider an alternate facility for Continuity of Operations. Ensure you have the necessary equipments and vital records to perform your core functions for a period of time.

Disaster Response Plan

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DocumentationInventory your personal and business assets before the disaster occurs.

Document the purchase date, price and estimated replacement cost of furniture, computers, security equipment, machinery and other property.

Regularly photograph or videotape your facility and its contents to accurately document your business assets.

Disaster Response Plan

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Once you’ve done your inventory, arrange for off-site backup and storage of the written record of your property and other vital records. Computer data should be backed up routinely.

Consider professional information protection and storage companies to provide data protection solutions.

Disaster Response Plan

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Telecommute When Possible

The nature of your business should determine if some or all your staff could telecommute in the event your facility remains inaccessible for an extended period.

Contact Information

Keep emergency telephone numbers handy and designate a staff contact persons to reach other employees, family members, essential customers, vendors and insurance agents.

Maintain Contacts Through Website

Post information about your business recovery plans on a website so that vendors, suppliers and customers can stay informed. Remain positive.

Disaster Response Plan

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Employees Awareness of Plan

Seek employees’ input.Discuss the plan and provide copies to your staff. Ensure everyone understands their role and knows the line of succession.

Conduct Simulation Exercises

Periodically, test the effectiveness of the response plan with your employees using simulation exercises. Revise plan where necessary.

Disaster Response Plan

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Preparedness tips for businesses, homeowners and renters are available: www.sba.gov/services/disasterassistance.

Business-focused preparedness tools & information can be found at: www.PrepareMyBusiness.org.

The federal government’s preparedness website www.ready.gov is another helpful resource.

Preparedness Tips

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For more information on SBA disaster assistance, contact our Customer Service Center at:

1-800-659-2955,

Send an email to:disastercustomerservice@sba.gov

or visit:www.sba.gov.

Contact Information

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