A series of natural disasters during the past few years has threatened the survival of businesses across the nation. Flooding in the Midwest destroyed data systems and inventory, earthquakes in California caused structural damage and injuries to employees, and severe winter storms on the East Coast shut down operations for weeks. Not to mention the serious consequences from factory explosions, hazardous waste spills and other isolated disasters.

Leonard Gatewood, owner of Radio Supply, Inc. in Oklahoma City, will testify that disasters can come in the most unexpected forms. In April 1995 when a terrorist bomb went off in the federal building just two and a half blocks from Gatewood's business, his facility sustained substantial physical damage.

"It didn't put us out of business," says Gatewood, "but after the smoke cleared and we had the building evaluated by engineers and insurance people, we realized we'd need to move to a new location." However, since Radio Supply, Inc. had operated in downtown Oklahoma City for 36 years, he worried that such a move could be devastating. Gatewood soon discovered that the federal government is there to help in the midst of all the mayhem.

In disasters such as the Oklahoma City bombing, the U.S. Small Business Administration (SBA) works alongside the Federal Emergency Management Agency (FEMA) to respond quickly and efficiently. Since the early 1990s, these agencies have taken advantage of new network technology to process information and get help to victims right away.

When a major disaster hits, FEMA representatives examine the area to determine whether or not to recommend that the president make a disaster declaration. FEMA and SBA Disaster Assistance representatives then work cooperatively to set up local services. These include a teleregistration center to process requests for assistance, a loan office to explain the application process to victims, and teams that visit damaged sites to assess their eligibility for assistance.

"A little known fact about the SBA is that it acts as the federal government's emergency bank when a presidential declaration of disaster has been made," explains Herb Mitchell, associate deputy administrator for SBA Disaster Assistance. In cases of disasters not deemed major, SBA can make its own declarations, he says. In both instances, the SBA provides a variety of long-term, low-interest loans to cover uninsured losses and get people back on their feet.

When private insurance does not cover all damages incurred, small and large businesses can apply for help through the SBA. Even for those with insurance, SBA may also provide loan assistance but will require that the insurance proceeds be used to pay off the SBA loan. The disaster loan program also assists homeowners and nonprofit organizations.

Leonard Gatewood and his family worked with their regional SBA office to apply for a disaster loan that would help Radio Supply, Inc. move to a new downtown location. The SBA even assigned a representative who helped them throughout the application process, making sure they provided enough information for the paperwork to go through smoothly.

The SBA offers Business Physical Disaster Loans to businesses of all sizes that have sustained property damage or equipment loss. Those who need working capital to get through the disaster recovery period can apply for Economic Injury Disaster Loans (EIDL).

Should you experience a potentially devastating disaster, rest assured that help will not be far away. As Leonard Gatewood says, "Frankly, I'd heard all the horror stories about how difficult it was to get disaster assistance and how long it would take. In our case, this proved completely untrue."

Keeping a Roof over Their Heads

Their 18-year-old company, which Alan started in Dallas with only a truck and a ladder, survived its first major threat in the mid-1980s when a faltering economy forced construction businesses across Texas to close down. The second threat was in May of 1995 when an unrelenting storm hit Dallas and surrounding areas, causing major floods.

The Rodgers had just moved the Zenith Roofing and Sheet Metal's offices to a new building when water destroyed their records, most of their computers and a great deal of their hope for future security.

The irony of the disaster was that it created a huge demand for roofing work. The Rodgers got 200 calls for work during the three days their business was being washed away.

"We couldn't even use our trucks because most of them were underwater," Debra recalls. "We told people, ŒSure, we can work on your roof, if you can bring us a truck!'"

After draining all their personal and business savings accounts and getting a higher line of credit from the bank, the Rodgers still could not afford to restore their business to operational condition. Finally, after an investigative visit from city, state and Federal Emergency Management Agency (FEMA) officials, it looked as if Zenith might qualify for an SBA physical disaster loan.

As bookkeeper and controller for the firm, Debra Rodger was responsible for filling out the SBA loan application. She worked painstakingly on retrieving information from clients, accountants and subcontractors to replace the company's lost records. Remembering the struggle, she asserts, "Getting this loan was vital to our survival."

Her thorough work helped SBA process the application quickly, and the agency was able to offer terms that surpassed the couple's hopes. Their loan of $153,000 will be paid back over 23 years at four percent interest.

"To the SBA, this dollar amount was just a figure calculated from all the paperwork we submitted," says Debra. "But to us, it was the greatest news we'd ever received."

Help Is on the Way

How much can I borrow from the SBA? The Small Business Administration makes physical disaster and economic injury loans up to $1,500,000. The amount of your loan will be based on your application and your ability to obtain private funding.

What will the interest be on my SBA disaster loan? The interest rate is usually about four percent, but may vary depending on other credit sources available to you. The loan terms depend on your ability to repay, but the maximum maturity is 30 years. Businesses able to secure credit from other sources must repay the loan within three years.

How time consuming is the application process? SBA loan applications ask for the same information that is generally required for bank loans. Personnel in regional SBA offices are available to help with the process.

How can I spend the loan money? You can use the SBA loan to repair your premises, replace office equipment and machinery to pre-disaster conditions, or meet necessary financial obligations to continue business operations after a disaster.

Who do I contact first? As soon as a disaster is declared, FEMA and SBA representatives respond by setting up a teleregistration center. The toll-free number will be widely publicized at that time. These agencies also operate temporary loan offices at the disaster site.

Where do I find out more about federal disaster assistance programs? Contact SBA Disaster Assistance headquarters at (202) 205-6734 for general information. Or, to order A Guide to Federal Aid in Disasters (FEMA 262, 1995), contact FEMA Distribution Facility at 8231 Stayton Drive, Suite D, Jessup, Maryland 20794. (800) 480-2520.

Excerpted with permission from Small Business Success magazine, Volume X, produced by Pacific Bell Directory in partnership with the U.S. Small Business Administration and the Partners for Small Business Excellence.