No matter how prepared your business is, rebuilding after disasters is going to be a struggle. According to the Federal Emergency Management Agency, some 40% of small businesses never reopen after a disaster. The good news is that you can apply for financing to make the rebuilding process easier on your business.
Recently, Hurricanes Harvey and Irma have caused enormous destruction and hardship in Texas and Florida. According to some reports, the cost of Irma alone is in the $300 billion range. Recovery has started after Hurricane Harvey in Houston, and Floridians are just beginning to emerge after Hurricane Irma. It’s so important for small businesses to rethink their preparedness and take measures to overcome the challenge of trying to rebuild.
Many small business owners usually have the following financial hardships because of a disaster like a storm:
- Cash Flow Shortages
- Checks from customers are lost in the mail
- Local customers can’t pay vendors/suppliers
- The business wasn’t able to generate revenue, thus causing a gap in revenue/profit for that week(s) of the storm
- Damaged inventory that causes a delay in sales
- Unsold inventory being now due for payment to vendors
- Secondary Causes
- Shipments from overseas/domestic are held up at the shipping port
- Canceled orders from customers
- Damaged roads near the business
- Direct damage to computers, digital software and data losses (it’s important to use a service like Dropbox or a cloud server so to quickly recover files)
Although the federal government usually offer low-interest loans and grants to disaster victims, you’ll often wait for months to receive the money, thus being unable to address immediate cash needs.
Fortunately, there are reputable business funding providers and payment processors like First American Merchant that offer exceptional merchant services, including a bad credit merchant account, to merchants of any type. FAM is an award-winning alternative online lender and payment processor that specializes in the high risk industry and boasts an A+ rating with the BBB.
Many companies that are faced with cash flow shortage due to a storm, slow sales or sales on credit terms usually turn to banks. However, the bank isn’t the best option to try, especially if you don’t have excellent credit or have no credit at all.