In my March column, I wrote a little bit about my experiences in New York City helping small businesses that were trying to obtain disaster relief loans after Hurricane Sandy. I was looking forward to having the opportunity to help these business owners, but we all met with a lot of frustration. So I want to pass along some tips for any small businesses that might run into a situation where you need to try to get some sort of financial assistance. Up here in the north country, it probably won’t be a hurricane or flood, but it might be a severe blizzard, an ice storm, a microburst or a fire.

Try to keep copies of all your important documents in a safe place. These would include deeds, insurance papers, inventory records, equipment leases, etc. Review your insurance coverage on a regular basis and don’t skimp on the basic insurances that you need. Consider some type of business interruption insurance. One of the issues that many of the businesses down there ran into was that flood insurance was very expensive. Furthermore, many small businesses that rented space discovered that the building owner wasn’t properly insured.

Sarah O'Connell

Try to put cash aside for a safety net if needed. I know this is difficult for many small business owners — hey, I was one, too — but an emergency fund that would cover at least six months of regular expenses could save your business someday. The loan conduits in NYC were quickly overwhelmed with applications so that even 60 days later, some businesses were still waiting to see if their application had been reviewed, much less a loan approved and disbursed. [Read more...]