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How Can You Afford To Rebuild Your Business After A Natural Disaster?

Regardless of where in the U.S. your business is located, it is likely at least somewhat vulnerable to one or more natural disasters. From wildfires to hurricanes and tornadoes or even earthquakes, there are very few parts of the country where residents are mostly immune to large-scale damage. While insurance can help cover some of the costs inherent in restoring your real estate and replacing your inventory, it won't always cover all the costs associated with reopening your business. How can you finance the rebuilding of your business after it suffers damage from an environmental disaster? Read on to learn more about some of your options.  

Federal emergency grants 

When the federal government declares a "state of emergency" in a certain location (such as after a fire, flood, or hurricane), this designation can often open up available funds to you and other residents who need assistance to rebuild. For example, after Hurricane Katrina devastated parts of New Orleans and the Gulf Coast, federal agencies helped provide grants and loans to businesses seeking to reopen and revitalize the local community. 

If the disaster that leveled your business caused additional damage elsewhere, you may be able to qualify for forgivable loans or grants that can help you get back on your feet without dipping into your own pocket. You'll likely want to seek the assistance of a grant writer or other individual familiar with the federal government's grant process who can give you more information about the process.

Small Business Association (SBA) backed loans

Although the SBA doesn't act as a lender itself, this government-backed organization guarantees loans made to approved borrowers, helping these borrowers secure favorable interest rates and maximum loan amounts they might not be able to qualify for on their own. Most SBA loans are used to start or remodel a business, but certain loans -- deemed "economic injury loans" -- are available to those who are trying to recover from a disaster that has left their business temporarily closed or in need of repairs.

By obtaining an economic injury loan, you'll be able to do everything from pay for needed repairs and replace damaged inventory to even paying your own household bills if you've fallen behind due to your recent lack of business income. Although you'll be required to pay this loan back (unlike some of the grants you may receive), the interest rates and terms of SBA loans are generally much better than those of your other options.