How Can U.S. Businesses Get Disaster Relief Funds

Posted by Mary Milorrie Campos
Sep 17, 2021
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If the recent wildfires and storms cause damage to your business, here are the disaster relief options you can explore to help you recover.

how to get disaster relief fund

Here are three ways on how you can get disaster relief funds.

1. File a business insurance claim

The first thing you must do following a disaster is to contact your insurer ASAP. Inform them about any damage, and find out if you can file a claim.

You must also prepare all relevant information such as:

  • Business records to prove the value of your damaged property and equipment.
  • Financial documents, if you are filing business income claims.
  • The estimated amount of repairs.
  • Images or videos of the damages caused by the disaster.

The more information you can give, the faster your claim will be processed.

Even if your business is safe from the recent happenings, you should still ask your insurer about the coverage of your plan. Make sure it covers the common disasters in your area to prepare your business for any calamities.

Take note: Filing an insurance claim is the first thing you must do when securing disaster relief funds for your business. By law, disaster-assistance grants can’t provide the same benefits for losses covered by your insurance.


2. Apply for SBA disaster loans

The U.S. Small Business Administration (SBA) offers low-interest loans to help you rebuild your business after natural disasters. 

You can apply for an SBA disaster loan if you have losses not covered by your insurance or if you haven’t received funding from the Federal Emergency Management Agency (FEMA).

Who qualifies for small business rates relief?

To qualify, you must be:

  • From a declared disaster area
  • Affected by declared disasters

SBA offers four types of disaster relief loans, as shown in the table below:

Type of loan

What is this loan for?

Physical damages loan

  • To help you repair and replace your damaged physical assets. 
  • If you’re qualified, you can get a loan of up to $2 million.

Mitigation assistance

  • To help you rebuild your property after a declared disaster. 
  • It lets you increase your SBA loan by up to 20%.

Economic injury disaster loans (EIDL)

  • To help you meet your financial obligations and operating expenses.
  • Your business must be a:
    • small business, 
    • small agricultural cooperative, or
    • Private non-profit organization.
  • A loanable amount of up to $2 million.
  • You can still apply for EIDL even if you’re qualified for the physical damages loan. The combined maximum amount for both loans is still $2 million.

Military reservist loan

  • To help you cover operating expenses incurred from an essential employee who is on active duty.
  • You can get a loan of up to $2 million.
  • If have the ability to fund your own recovery, you will not qualify for this loan.

You can also check the disaster assistance page of SBA for more information.


3. Get tax relief

If you’re from a federally declared disaster area, getting tax relief is another option you can consider. With this government assistance, you can deduct from your tax the amount you’ve lost due to calamities.

For more information, you can read this resource guide (PDF, 468 KB) prepared by the IRS to learn the step-by-step process of claiming a loss.


Final thoughts

We still have a long way to go before the 2021 Atlantic hurricane season ends on November 30. On top of this, the North American Wildfires continue to spread, with about 79 active fires across the country as of September 14.

These natural disasters leave negative effects on businesses — from structural damages to supply chain problems. Of course, preparing a disaster recovery plan can help you lessen its impacts. But nature can also be very dangerous and can mess up even the best plans. We can never tell what kind of destruction it brings.

When disaster strikes and it affects your business, make sure to check if there are business disaster relief grants available for your business.  Remember, you don’t have to shoulder all losses alone. Aside from the disaster relief funds we’ve discussed here, there are various options available outside. You just have to explore and learn what they are.

Dealing with the aftermath of natural disasters requires patience and hard work. Sometimes, it challenges you to build your business from the ground up, especially when your property got totally destroyed. 

Whenever possible, prepare your contingency plans before calamities strike your business so you can have a guaranteed fallback. Maintaining a positive cash flow and saving emergency funds are two of the best practices you can try. They give you the ability to cover losses while you wait for insurance claims and government support.


Our Outsourcing: How to Make it Work guide explores how you can utilize accounting and finance outsourcing to drive growth to your business and add value to your processes.