Various financing options are available to help Baton Rouge area businesses and nonprofits recover from the August flood, as Business Report details in a feature from the current issue. Disaster recovery loans from the U.S. Small Business Administration are just one financing option, with up to $2 million available per applicant.
“The most important advice we can offer to businesses is to apply to determine for what they’re eligible, and choose whether to accept or reject the offer afterward,” says Ansley Zehnder, the Baton Rouge Area Chamber’s senior vice president of marketing. “Even if a company chooses not to proceed with an SBA disaster loan, the application process can help to crystalize a business owner’s recovery planning.”
The deadline to apply for an Economic Injury Disaster Loan is May 15, 2017. Last week, the SBA announced that it has extended the deadline for Physical Damage Loans to Monday, Nov. 14.
BRAC recommends setting up an appointment with an adviser at the Louisiana Small Business Development Center, which offers free consulting services. A certified financial planner also should be able to help businesses sort through your options.
Stephen Barnes, who directs the Economics and Policy Research Group at LSU’s E. J. Ourso College of Business, was involved in a major research effort measuring Louisiana’s recovery from the 2005 hurricanes. While the August flood was no Katrina, there’s at least one major takeaway from that report to keep in mind: Recovery takes time.
In the meantime, he warns that those recovering from the flood should not over extend themselves. It doesn’t hurt to apply for an SBA loan, but don’t be cavalier about taking on debt. That goes double for traditional bank loans, which will have less generous terms.
Further complicating these decisions is the possibility of additional help from the federal government. Congress has appropriated $500 million in Community Development Block Grants for flood recovery. About $400 million or so is expected to go to Louisiana, in what state officials hope is only a down payment on the $2.6 billion needed, says Pat Forbes, director of the state’s Office of Community Development.
How Louisiana will use its CDBG money has not been decided, but the program can be used to fund grants and loans for housing, infrastructure and economic development.
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