Top: Business: Management of Companies and Enterprises: Small Business: Disaster Relief

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General Information

In the United States disaster relief is provided to help people recover from disasters and rebuild their lives by providing affordable, timely and accessible financial assistance to homeowners, renters and businesses.

All declaration requests must come from the Governor or authorized representative. The Governor can ask for a Presidential disaster declaration or a Small Business Administration (SBA) Administrative declaration, depending upon the severity of the disaster. A Presidential declaration makes many Federal and State programs available, including SBA loans. An SBA declaration makes only SBA loans available.


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Presidential Declarations

The Governor contacts the Federal Emergency Management Agency (FEMA) if the State believes damages justify a Presidential declaration. FEMA conducts a Preliminary Damage Assessment (PDA) of the area. We join FEMA, State and local representatives in the PDA when the damages include homes and businesses. If the PDA shows enough damages, the Governor can ask for a declaration. FEMA forwards the Governor’s request and the PDA results to the President for a decision. If the President declares the area for Individual Assistance, SBA offers physical and economic injury loans in the declared counties and economic injury (EI) loans only in contiguous counties.


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Small Business Administration Administrative Declarations

If the damages are less extensive the Governor can ask for an SBA declaration. When the Governor’s request for assistance is received, a survey of the damaged area(s) is conducted with State and local officials, and the results are submitted to the Administrator for a decision. When the Administrator of SBA declares an area, both primary and adjacent counties are eligible for the same assistance.


SBA will make a physical disaster declaration when:
- At least 25 homes (primary residences) and/or businesses in a county have uninsured losses of 40% or more of their estimated fair replacement value (Secondary homes, condominium units, cabins, camps, lake homes, etc., used for recreational purposes are not included in the count.)
- At least three (3) businesses have uninsured loss of 40% or more of their estimated fair replacement value and, as a direct result of the damages, 25% of the work force in the community would be unemployed for at least 90 days.

SBA will make an economic injury disaster declaration when:
- A Governor certifies that at least 5 small businesses in a disaster area have suffered substantial economic injury as a result of the disaster and are in need of financial assistance not otherwise available on reasonable terms,
- The Secretary of Agriculture designates an area as an agricultural disaster area. SBA may make Economic Injury Disaster Loans to small business concerns and small agricultural cooperatives in the designated counties without credit available elsewhere,
- The Secretary of Commerce makes a commercial fishery failure or fishery resource disaster under Section 308(b) of the Interjurisdictional Fisheries Act of 1986.


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based

1. http://www.sba.gov/disaster_recov/prepared/getready.html



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