When natural disasters such as hurricanes, blizzards and fires wreak havoc, small businesses often suffer greatly. Many of them do not have the ability to overcome a sustained loss of income, and this puts them in a state of economic peril.

For instance, in 2012, Hurricane Sandy caused billions of dollars in damage to residential and business areas, particularly along the East Coast. Seaside towns in New Jersey and New York were particularly hard hit.

Fortunately, when disaster strikes, funding is available in the form of low-interest SBA disaster loans for business owners who need to rebuild. If one of your clients suffers losses related to a natural disaster, there are two different types of funding available.

Business Physical Disaster Loans

If a storm causes substantial damage a company’s physical location, business owners can apply for up to $2 million in funding through the SBA to help restore operations. A Business Physical Disaster Loan can provide monetary relief to help restore damaged property, make improvements, and replace lost inventory. The interest rates for this type of funding can be as low as 4 percent.

Economic Injury Disaster Loans

Even if a business emerges physically unscathed, the impact of a natural disaster can be far reaching because it hurts the pocketbooks of customers who may have lost their disposable income to spend on restaurants, spa treatments and other goods and services.

Their loss of personal cash flow will ultimately impact the bottom line of neighborhood businesses. When this happens, a business may qualify for an SBA-backed Economic Injury Disaster Loan. These loans are meant to help a company emerge from the (hopefully) short-term local economic downturn related to a natural disaster.

If your clients are impacted by natural disasters, here are a few sage reminders to give to them:

  • Assess the damage, keep good records, document by taking pictures and videos that can be submitted to insurance companies.
  • Contact an insurance agent with any questions about what is covered and what is not.
  • File claims quickly in order to get the money faster. Some policies require that claims are filed within a specific time frame in order to be compensated for losses.

After claims have been paid by the insurance company, determine whether the resolution is satisfactory. If not, look for a new insurer.

Clients may encounter hurdles that damage their businesses at any time of the year. The winter of 2014-15 was particularly cold, and people tended to stay home rather than brave the elements to shop or dine. Other unforeseen circumstances can hurt small businesses.

If your clients are in a cash crunch, online lenders such as Biz2Credit are available to help quickly arrange funding and attractive rates and terms.