Benjamin Breskman’s nightmare began in September 1999, in the aftermath of the devastation caused by Hurricane Floyd. His Sentry Paint Technologies manufacturing plant in Darby, Penn., was nearly destroyed by the 17 feet of floodwater that swept through the building. The plant sustained more than $2.7 million in damages.
As soon as the water level dropped a bit, Breskman and his 18 employees went to work, starting the cleanup and recovery process. He also applied for an SBA disaster loan, which covered rebuilding costs. A year later Breskman hosted a belated 50th anniversary party for his company.
When disaster strikes, the U.S. Small Business Administration is prepared to support homeowners, renters and businesses of all sizes as they rebuild in the aftermath of a disaster. SBA loan officers swing into action once a disaster declaration is made by the president or the administrator of the SBA.
Since 1953, the SBA has approved 1.7 million low interest disaster loans for more than $33 billion. After the devastating 2004 hurricane season, when four major storms hit Florida and 13 other states, the SBA approved more than $2 billion in disaster loans to about 63,000 residents and business owners.
Typically, the majority of disaster loans are made to homeowners and renters. Homeowners may borrow up to $250,000 to repair or replace damaged or destroyed real estate. The SBA may also lend up to $40,000 to renters and homeowners to cover the costs of replacing personal property such as appliances, furniture, clothing or cars.
When a disaster causes property damage to a business of any size, the business owner may borrow up to $1.5 million to repair or replace the building, equipment, machinery, inventory and other business assets.
SBA also makes economic injury disaster loans of up to $1.5 million to small businesses that may not have suffered any physical damage, but were financially impacted by the disaster. Interest rates on all SBA disaster loans are typically 4 percent or less, with up to 30-year terms.
After the attacks on the World Trade Center and the Pentagon on Sept. 11, the counties surrounding New York and Washington, D.C., were declared federal disaster areas, allowing business owners and residents to apply for SBA disaster loans.
With the closing of airports and the increased security at the U.S. borders, the downturn in travel wreaked havoc among small businesses across the country. The SBA made the unprecedented move of expanding the economic injury disaster loan declaration, making those loans available to eligible small businesses across the United States and its territories. In the year following the attacks, the SBA approved over $1 billion in economic injury disaster loans to more than 11,000 small businesses.
The program is flexible enough to adapt to a number of special situations. For example, some businesses were hurt by the loss of a key employee or partner as the military reservist call-up gained momentum after war was declared in Iraq. The SBA responded by making economic injury loans available for businesses affected by the call-ups.
The Military Reservist Economic Injury Disaster Loan (MREIDL) program makes low-interest loans available to help these companies cover their financial obligations until after the employee or partner is released from active duty.
It’s impossible to predict where or how severely a disaster will affect a home or business, but it’s always a good idea to prepare. Maintaining adequate insurance, assessing hazards and developing a solid emergency plan are strategies that can lessen the financial impact of a disaster and save lives as well. Additional information on the SBA’s Disaster Assistance programs is available online at http://www.sba.gov/disaster_recov/index.html.
Small Business Success
In fall 2003, during her second year of law school, Moira S. Brennan, Esq., decided to take advantage of her paralegal experience and start her own business, Abacus Legal Documents Services. She had worked with a family law firm and had practical experience in that area. While she could not provide legal advice, she could help her clients by completing the confusing legal forms associated with dissolutions. Brennan has since graduated law school and as a brand new attorney is expanding her services to include estate planning.
Brennan recently utilized the proceeds from an SBA guaranteed loan to purchase office equipment and supplies, which will allow her to offer higher quality products and services. She has also taken advantage of the counseling and training programs offered through the SBA’s resource partners.
When she first started her business she sought and received guidance from the Women’s Business Center of California (WBCC) in low- to no-cost advertising, attended some of their training programs and was able to network with other women in business for useful suggestions and practical support. In addition, SCORE: Counselors to America’s Small Business reviewed her business plan and provided useful feedback that she greatly appreciated.
Brennan’s business sprang from a desire to assist people who could not afford expensive legal representation. She brings integrity and heart to her business and enjoys helping those in need. In addition to donating her time and services to some clients who were really in need of legal services and had no funds to pay, she has also donated an estate planning package to her church fundraiser for auction and contributes her time and writing skills to the Lawyers Club of San Diego, as a member of the editorial board for its newsletter.