Disaster Recovery
Selling to Disaster-Stricken Areas

Hurricane Harvey has devastated the country's 3rd largest county in population. So how do businesses provide products or services during and after a disaster?

Officially, small businesses and local businesses must be considered in all contracts. Unofficially, it is difficult for emergency officials to reach these businesses in a disaster. Therefore, it is best to get on the procurement list of all the local cities and counties in your area BEFORE a disaster strikes.

Selling to FEMA

First, FEMA does not buy a lot of "stuff". Instead, it provides grants to cities, counties and states. So you will need to contact the LOCAL government agencies to sell your products and services.

With that said, the local government agencies have to comply with FEMA's requirements when they purchase items. So you will also need to know a bit about FEMA.

Here is information about selling to FEMA:

How to Sell to FEMA

Debris Contracting Guidelines from FEMA

FEMA Procurement Guide

Be prepared to provide cost information and your company background, and fill out lots of paperwork. The government does not want fraudulent or disreputable contractors.

Here is more information about selling to Government.

Selling to the Red Cross

The Red Cross handles emergency supplies and food during the immediate disaster. Its procurement site is: Red Cross Procurement.

Selling to Government agencies who will receive FEMA funds

The state, counties and incorporated cities receive FEMA funds. Other government districts can apply for FEMA funds as well. Businesses can sign up as vendors and can watch for bid opportunities. If a large company gets the bid, they are generally required to subcontract with smaller businesses, so be sure to contact them so that your business can be considered.

Here are the government procurement websites in the Hurricane Harvey area:

Selling to the State of Texas

Selling to Harris County

Selling to the City of Houston

Here is a list of cities in Harris County that are likely to get FEMA funds:

List of Cities in Harris County (Look for cities only)

More Information

As part of YOUR disaster preparation plan, get signed up as a vendor for your local government agencies. Click here for the websites.

If you want to remove debris, YOU MUST HAVE HAZMAT CERTIFICATION.

FEMA provides funds to non-profit childcare centers for providing services during and after disasters.

Get Copies of Your Tax Returns

Many programs that will help you recover from the disaster will require copies of your tax returns. You can get the basic tax information (a transcript) for free, or you can request a copy of the entire tax return with schedules for a fee (about $23 per return).

Form 4506T is a request for the free basic transcript

Form 4506 is a request for the entire tax return (fee)

SBA Disaster Loan Process

SBA disaster loans are only available if your location has been declared a federal disaster area.

The SBA has two types of disaster loans, one for physical property and the other for working capital (economic injury). All businesses can apply for a physical property disaster loan; but only small businesses can apply for the economic injury loan.

Physical property disaster loan (including inventory)

Repair or replacement of real property, machinery, equipment, fixtures, inventory and leasehold improvements may be included in the loan. In addition, disaster loans to repair or replace real property or leasehold improvements may be increased by as much as 20 percent to protect the damaged real property against possible future disasters of the same type.

Click here for more information

Working Capital (Economic Disaster) Loan

Applying for the loan

The first step is to obtain copies of the last 3 years tax returns from the IRS. You can call and request them at (800)829-1040. You will need to create a personal financial statement and a business' balance sheet current within the past 90 days. Don't let these three steps overwhelm you. If your financial records were destroyed, you will need to recreate your business' balance sheet.

Assets Where to get info
Cash Contact your bank
Receivables Create a list of your customers served in the last 60 days. Contact your bank for the deposits made in the past 60 days.
Inventory This is the inventory you had before the disaster. List each item and estimate the quantity and purchase price
Fixed assets The value of your building or equipment - use the number from the balance sheet on your tax returns.
Liabilities Where to get the info
Accounts payable Create a list of the bills you are aware of
Equity Use the information from your tax return's balance sheet
Loans Difference between all your assets minus your liabilities

If you have collateral, the SBA will expect you to pledge it for the loan, however a lack of collateral will not prevent you from getting a loan.

Now you are ready for the loan paperwork:

Click here for the application.

Did You or Your Employees' Lose Pay Because of the Disaster? Here's Help

If the President of the United States declares a disaster in your area, payment of Disaster Unemployment Assistance (DUA) may be authorized. Individuals (including self-employed) who become unemployed as a result of the disaster, and who do not qualify for regular Unemployment Insurance (UI) benefits, may file for DUA.

For more information, click here.

Business Loss? Tax Refund

Normally, if a business (except a C-corporation) has a loss that exceeds the owner's other income that year, the owners can "carry back" the loss and file amended tax returns for prior years. It is called a NOL - or net operating loss carryback. The loss reduces your taxable income for the prior year and then you recalculate the taxes due and request a refund for the difference between what you paid in a prior year and your revised tax. You must carry back the loss beginning 2 years before the loss occurred, and if you still haven't used up your NOL loss, you apply it to last year's income. If you still have loss, you can carry the remainder forward to offset future years' income (up to 20 years).

If your business loss was due to a Presidentially-designated federal disaster, you can take the NOL against your income 3 years ago, and then against your income 2 years ago, and then last year. This means that if you have a large loss, it is more likely that you can get refunds for past years rather than having to wait until future years revenue.

The forms to use are: IRS 1045 for "fast-turnaround" losses; otherwise 1040X. Both have the same results, but 1040X is processed slower. Contact the IRS at (800)429-4933 or your tax advisor for more information.

Calculating Business Damages After A Disaster:

Tips To Expedite Your Insurance Claim

This is a free, recorded webinar hosted by Interstate Restoration, that gives tips on how to calculate business damages and expedite your insurance claim. The information is primarily for business interruption insurance. You are required to register, but there is no fee. When you click on the link below, it is the third webinar on the page.