Small Businesses Unprepared For Natural Disasters
A new survey of New York City businesses affected by Superstorm Sandy revealed that many would be financially unprepared if another disaster occurred. The superstorm, which struck on Oct. 29, 2012, left damages amounting almost $70 billion to the East Coast, CNBC reported. After a year of recovery, many small businesses indicated that another hit would be debilitating.
Of the businesses significantly impacted by the storm, 52 percent said they were not financially prepared for another disaster, according to a survey by Anchin, Block & Anchin, which included 266 small business owners and managers in metropolitan New York City, New Jersey and Connecticut. Furthermore, 30 percent said they would need to make staffing cuts if another major storm were to occur, Insurance Journal reported.
Aside from damages, the storm impacted businesses by hiking various expenses, including commercial rent and insurance premiums. Furthermore, the storm left the area partially immobilized for many days, causing businesses to lose sales and lower productivity.
Despite the heightened bills and loss of revenue, 19.1 percent of affected businesses managed to invest in technology or infrastructure that could protect them in the event of another storm. However, Greg Wank, partner of Anchin, Block & Anchin, holds that the remaining businesses could be putting themselves at risk, Insurance Journal reported.
“Business owners have invested in fixing their infrastructure and in some cases provided for off-site back-up so they can keep working in the event of another disruption,” he said. “However, it’s clear that not enough owners have built enough in cash reserves for disaster/backup funding or have arranged for contingency financing.”
Noting that only 3 percent of business owners said they obtained financing since the storm, Wank explained that another natural disaster could lead to a scramble for capital. In such a scenario, only those who’ve already secured a lending source will survive.
Among the 97 percent of businesses who did not obtain funding, some might have been discouraged by tighter lending policies from banks, hefty paperwork, or lengthy delays in processing. Many need to stay focused on their business to keep up and running, yet the threat of another natural disaster looms from coast to coast. Fortunately, a small business lender can provide financing without the hassle. Loan services from National Funding feature a simple application process and fast approvals, sensitive to the needs of small businesses.