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Small Business Owner Receives Disaster Loan

Surviving a Disaster

John and Rayetta Price, owners of Skipper’s Pier Restaurant in Deale, Md., understand only too well the appropriateness of the Phoenix Award they received from the U.S. Small Business Administration in 2005. The Phoenix Award, named after the mythological bird consumed by fire later to rise renewed from the ashes, is presented to those individuals whose efforts and contributions have enabled their businesses to recover successfully from a disaster.

In September 2003, a tropical storm, the remnants of Hurricane Isabel, deposited three feet of flood water in their restaurant destroying the main dining deck and pier. The entire property was covered with tons of debris.

“Until you go through that experience you have no concrete basis on how to prepare. It is difficult to appreciate what you will face,” said Price. “We thought we had prepared. We boarded up the windows, filled sandbags and placed them around the property, but it was not enough. We relied on historical precedent—damage like this had never happened here before.” And then it did. Develop a Plan.

Based on their experience, the Prices have developed a comprehensive plan to cover the pre- and post-storm periods. “Even though we are a ‘mom-and-pop’ establishment, we still need a plan. All small businesses should have a plan,” he says. Price has divided responsibility for implementing the plan among his five managers. Everyone knows his or her responsibilities. I think the plan will help us have a shorter recovery if there is a next time.”

Price recommends identifying what types of perils might befall your business. “Sit down with your insurance agent and critically review your coverage. It’s important to know if your coverage is for replacement or depreciation and where you will get funds to supplement what the insurance will not cover.

“It’s important to get back on your feet as soon as possible. I thought we’d be able to reopen in a week because the damage look superficial but it actually took six months. I was basically out of business yet I had bills to pay, employees on the payroll. Included in my preparation plan is a list of preferred vendors who have agreed to provide service with 24-48 hours of a disaster,” he said.

Price has made arrangements to have perishable food and expensive equipment removed from the restaurant to a safer location and then returned as soon as the danger has passed. “All businesses should examine their equipment and inventory and determine if these could be moved quickly to a safer location and make arrangements in advance to have that covered.”

Having gone through the process of applying for an SBA disaster-recovery loan, Price now knows the importance of keeping records safe at an alternate location. “I lost seven years of records during the storm. These were very important in providing documentation to receive a loan. We now keep all our records electronically off-site of the restaurant and have computer back-up systems to ensure that we do not loose records in the future.”

Price says that receiving an SBA disaster-recovery loan prevented him from declaring bankruptcy. “I went to the disaster command center and the SBA representatives guided me through the loan application process. I was very skeptical, and in 10 minutes my attitude changed completely,” Price said. “The loan application process can be an overwhelming and complicated. But Price urges other small businesses to begin the process as soon disaster assistance is available. Acknowledging that there is a lot of paperwork to complete, Price believes it is worth the time and effort to complete the forms.

In April 2004, Skipper’s Pier restaurant reopened. Price reports that business is better than before the storm. And he feels better prepared for safeguarding his livelihood.  

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