Federal Disaster Assistance for Businesses: Summaries and Policy Options

Following natural disasters and other emergencies, businesses often face damage to property, inventory, and other assets. Businesses may also face challenges related to infrastructure damage, disruption of services, and dislocation of employees, suppliers, and customers. These challenges impact the communities and regional economies that rely on these businesses for revenue, employment, and civic and community contributions. The recovery process may take weeks, months, or years. Congress has expressed an interest in expediting business recovery to support disaster recovery and to encourage the conditions for economic growth and development. Most commonly, federal assistance to businesses is supplemental in nature, covering uninsured and underinsured loss. In recent years, Congress has provided appropriations for both direct business assistance and indirect or community-level assistance following natural disasters. The two approaches may facilitate business recovery in different ways by addressing different types of post-disaster challenges. Direct assistance to businesses has primarily been provided by the Small Business Administration (SBA) in the form of low-interest loans, the U.S. Department of Commerce (DOC) fishery disaster assistance, and the U.S. Department of Agriculture (USDA) assistance programs for agricultural operations. Indirect or community-level assistance is generally designed to address damage to transportation networks, infrastructure, telecommunications systems, and other physical assets that facilitate commerce, communication, public health, and transportation. Community-level assistance may be available through programs administered by several federal agencies, including USDA, DOC, and the U.S. Department of Transportation, among others. This report describes the challenges faced by businesses following a disaster and the rationales for federal business recovery assistance. It also provides summaries of selected federal assistance programs. The summaries include information regarding how declarations factor into the implementation of the programs. Each of the assistance programs have varying eligibility requirements related to disaster declarations or events. Some of these programs depend on a declaration to be put in effect and others may be available to businesses and communities without a declaration. As the frequency and severity of disasters increase, policymakers may seek to review the scale, scope, and approach to federal business recovery assistance. Additionally, Congress may consider whether to target disaster assistance to particular types of businesses and/or locations. For instance, certain types of businesses may face unique barriers to recovery. Business size, type, location, community characteristics, and other factors may make certain businesses more likely to have delayed or unsuccessful recovery outcomes. Policymakers may seek to review aspects of federal programs in order to address specific barriers to recovery as well as barriers to accessing assistance. Congress may seek to review the level of assistance that is available and potential gaps or unmet, industry-specific challenges. Congress may also seek to review which objectives to prioritize, aspects of individual programs, and how programs may or may not be integrated across federal agencies and different levels of government.