Damage from natural disasters happens to businesses in every climate and on every corner of the United States. No business is wholly insulated from extreme weather or natural phenomena, and nothing is more frustrating than if your business suffers damage that could have been avoided. Weatherizing and mediating damage from natural disasters at your place of business is as important as any other precaution you can take. One of the major reasons small businesses may put off building improvements for the purpose of mitigating damage from natural disasters is undoubtedly the high price tag of many of those improvements. While there are several more general financing options when planning to improve your business, the SBA’s Mitigation Assistance Program – an expansion of their larger Disaster Loan system – may seem like an attractive option for making safety improvements to your business. It is then essential that small businesses understand where and when SBA-backed mitigation assistance is possible.
What is SBA Mitigation Assistance?
The SBA’s disaster mitigation assistance program allows businesses within declared disaster zones to apply for additional funds specifically for improving their businesses to better protect against future disasters. To see if your business is in a current disaster zone, use the SBA’s classifying tool. Existing disaster loans can be expanded up to 20% in the name of mitigation assistance, but the total value of the disaster loan may not exceed $2 million. There are, however, several examples of when that cap has been waived.
This means, however, that your business must first be approved for a disaster loan to qualify for mitigation assistance. Approval for a disaster loan, of course, requires that your business suffer damage because of a declared and recognized natural disaster. The SBA directly explains that if you suffer damage to not only property or leased spaces but machinery, equipment, fixtures, or even inventory, you may be eligible for disaster assistance. That means even if your damage is rather small or not immediately pressing, applying for a disaster loan could also open the door to applying for that additional mitigation assistance up to 20% of your principle.
Applying for mitigation assistance is only allowed once your business has been approved for a disaster loan of any kind. There is no additional application for mitigation assistance and applicants must call the SBA directly (800-659-2955) or speak to your already-assigned inspector. It is then up to the business owner to explain their intended mitigation project.
What Qualifies as Mitigation Improvements?
Flood Mitigation Measures: Among the SBA’s examples of viable improvements can run from comparatively small projects like sealing a roof all the way to relocating your business outside of an existing flood plain. Depending on the size of the principle of your existing disaster loan, of course, larger projects will only apply to larger cases of damage. Mitigation examples also include landscaping to improve natural drainage, installing a sump pump, converting the lowest level of your building to reduce flood risk, or even elevating your entire business.
Wind Mitigation Measures: Wind damage can be related to anything from tornados to winter storms. Especially in colder climates, it is very common for the SBA to declare a disaster where heavy snowfall and storms impede daily life. Examples of viable projects include installing pressure-rated windows or a pressure-rated garage door, investing in hurricane roof straps, or even building a full storm shelter.
Wildfire Mitigation Measures: Considering how wide west coast wildfires tend to spread, it is possible for a business to be within a declared disaster zone and not necessarily suffer catastrophic damage. Thus, the SBA gives examples of improvements like installing a fire-rated roof, replacing combustible fences or gates, removing debris brought about by the wildfire, installing tempered-glass window panes or mesh screens to prevent ash from coming through air vents.
Earthquake Mitigation Measures: While several states require that new buildings be fitted with earthquake resistant materials, businesses in buildings built before those modern processes are often the most susceptible to damage. The SBA offers examples of mitigation such as buying anchors for rooftop-mounted materials, buying window film to reduce glass spread during a quake, or retrofitting masonry or concrete buildings. Once again, the SBA offers an extremely wide range (economic and manpower) of projects meaning that even if your project is not specifically listed, there is a fair chance it will still be considered.
Hail Mitigation Measures: Hail damage isn’t likely to level your entire place of business but if that damage is sustained over the length of a storm, hail damage can become very costly. If you are seeking mitigation in connection to a hail-based disaster loan, the SBA gives these examples of acceptable projects: installing steel gutters, replacing existing structures like skylights or shingles with more weather-resistant alternatives, or installing hail guards.
Preparing for the Worst Leads to Weathering the Best
The mitigation assistance program is best used by businesses who suffer enough damage from a natural disaster to justify a disaster loan but are not devastated so fully that they need to find a new place of business. Disaster loans are meant to bring your business back to working order as quickly as possible, and thus, the money from those loans is generally only allowed to be used on strictly essential elements. Mitigation assistance, then, is a fantastic opportunity to take up improvements and safety measures at the same rate of your disaster loan which is likely considerably less than non-SBA-backed loans. Further, the SBA gives an extremely broad spectrum of examples when explaining what applies as mitigation. Especially as hurricane season looms on the East Coast and Wildfires continue in the West, there are likely quite a few small businesses who could benefit from further mitigation.