How Do I...Deal With a Disaster?

Hurricane season is upon us, floods recently have ravaged places like Iowa and Wisconsin and wildfires have been burning some of California's most beautiful coast, so I thought I'd take a look at the resources available to help small firms prepare and recover from a disaster.

I interviewed Admiral Steve Smith, who heads the new Small Business Administration Executive Office of Disaster Strategic Planning and Operations, to find out about the new office and how it can help. This is the first in an occasional series of tools, tips and resources to help businesses think about disaster preparedness and response on federal, state and local levels.

Admiral Steve Smith heads a new disaster assistance and recovery office at the SBA. (Photo courtesy of SBA)

A month ago, Admiral Steve Smith joined the SBA to head the office, which reports directly to the SBA administrator and is responsible for overseeing the agency's disaster assistance and recovery operations. The office grew out of the agency's Accelerated Disaster Response Initiative created by former Administrator Steven Preston.

Smith spent 34 years in the U.S. Navy and retired as a two-star admiral. After leaving the Navy, he ran two small businesses - first a late-stage startup and then an initial stage startup.

Here are excerpts of our conversation:

Small Business Blog: Why did you decide to take this job?

Smith: I've run large organizations and have experience in financial management, budget preparation, program management and I was the congressional liaison with the Department of Defense. I've worked in Washington for about 10 of the 34 years.

I joined the SBA because of the challenge of this position. It's pretty exciting and it's a follow-up to the Accelerated Disaster Response Initiative. We're looking at disaster assistance in two ways - to ensure our readiness...and to make sure we're going to be responsive to citizens and communities.

I don't think it's well-known that the SBA provides the majority of homeowners' assistance after various disasters. I'd like to focus on disaster assistance but also disaster recovery...How can we help them get the assistance and support in the recovery period and help an area become economically vibrant? There are lots of other services within the SBA that can contribute to this...Part of my charter is to help integrate the efforts of the Office of Disaster Assistance and the other offices of the Small Business Administration.

SBB: How is your office helping small businesses?

Smith: On my second week on the job I was in Cedar Rapids [Iowa] where SBA has established a business recovery center. It's different than the response recovery center [led by the Federal Emergency Management Administration], although SBA does have a presence at the FEMA centers.

In Cedar Rapids, we're sitting down with small businesses and helping them get reestablished. In some cases they may need help and expertise in documentation. In other cases, they may have to redo their business plans. We're using our senior core of retired executives (SCORE) to sit down and help them plan their long-term recovery. We're also working with federal agencies to determine what other federal government resources might be available in that process.

When I was out in Iowa, I saw the initial things that the community was dealing with - if you don't deal with them quickly, it's going to impact how long the recovery will take. A business needs to know definitively if the power will be back on in six weeks or six months.

Also, we don't want to say to a business, "We'll get you funding as soon as we can." That's not a good answer because what does that mean - a month or three months? If it's a month, a business might be able to stay afloat through investors or personal credit cards until a loan comes in. I told them that our processing time standards are now 16 days with a disbursement within five days of that.

SBB: How can businesses get prepared?

Smith: They need to come up with the documentation they need to get a loan or some kind of help, but how many small businesses really do these things and have them ready? A lot of a focus in a small business is on cash flow to make payroll and you may not have a disaster preparation plan. I didn't have one in either of my two companies.

People also should know that even if they're not directly in the declared disaster area, they can get help. If a business has been economically impacted because all of its customers are in the disaster area or that's where its distributor is, it should register with FEMA and then come to a FEMA Disaster Recovery Center.

SBA also has a customer service center number: 800-659-2955. If you're a homeowner or a business and you think you've been impacted, lay out your situation and they'll explain your options to you. The important message is that there's a lot of assistance that's available to you.

SBB: I've heard stories and talked to people affected by Hurricane Katrina who weren't able to get anyone on the line when they called the numbers. Has that situation improved?

Smith: A huge number of things have been done since Katrina. The SBA has reengineered the disaster assistance process. Right now we have more than enough resources and we have a reserve force to call up additional people.

SBB: How would you grade the SBA response in Iowa?

Smith: I would give Iowa an 'A.' We've been working with the governor's office and a project called Safeguard Iowa. We have a robust network in Iowa right now led by the SBA district director. Loan processing is running at about six days to turn around loans. So far in Iowa, we've received 3,729 applications as of [July 8] and we've approved 832 home loans for $48 million and 46 business loans for $3.4 million. Applications usually don't ramp up until after four to eight weeks. You have to get the debris out, do an assessment and figure out what your insurance is going to cover.

SBB: How is your office funded and how does it fit in with the SBA organization?

Smith: Right now we're funded out of the administrator's office. I handle strategic issues and intergovernmental issues as well as readiness to respond to disasters. The Office of Disaster assistance handles day to day issues. Right now the staffing is being set up.

SBB: Is there anything you'd like to emphasize from our discussion?

Smith: If you're a business owner and you've been impacted, call the 800 number and ask questions. You don't necessarily have to have been located in the disaster area; maybe it was your major supplier or your major customers.

The process always starts with FEMA registration. FEMA tracks ZIP codes of people who are registering and it helps them understand the extent of the disaster. FEMA may set up a Disaster Recovery Center in their area. If not, go to the Disaster Assistance section of the Web site to see which center is closest to you.

People still have a perception of [the SBA] response after Katrina in their minds and in fact we were not doing a good job and not getting the information out as quickly as we needed to. But there's a been a total reengineering of the process and it's much, much better."

Helpful Disaster Information:

SBA Customer Service Number: 800-659-2955 and e-mail

SBA Disaster Assistance information, including links to recovery centers

SBA recently hosted a Web chat with a member of the Institute for Business & Home Safety, a national nonprofit supported by the property casualty insurance industry. The Q&A offers some helpful information.

FEMA Apply for Assistance: 1-800-621-FEMA (3362) or call TTY 800-462-7585 for people with speech or hearing disabilities.

By Sharon McLoone |  July 16, 2008; 9:30 AM ET How Do I...
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Please email us to report offensive comments.

I'm a former member of the American Red Cross in California, USA. I worked with people who were looking for shelter and personal safety. People of all ages and nationalities were welcomed. I know what it's like to be homeless, and frightened for my self and loved ones. Any disaster can result in challenging our selves and loved ones to retreat to safety when possible. Directing/managing a Red Cross Shelter helps others to help themselves and hopefully renew a manager's duty to see that all people are safe and relatively happy.

Posted by: Camille Pierce | July 20, 2008 1:57 AM

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