Small-business loans from the US government helped homeowners and businesses recover after tornadoes struck Massachusetts last year and following the Boston Marathon bombing. Now, companies reeling from the loss of business from this winter’s unusually heavy snows may be able to tap that kind of aid to recover.
The little-known series of disaster loans from the Small Business Administration is one of the key sources of help that Massachusetts officials are asking the federal government to provide to help the state recover.
“What we want to do is give as many people as many opportunities [as possible] to take advantage of help,” said Peter Judge, a spokesman for the Massachusetts Emergency Management Agency.
Governor Charlie Baker lobbied over the weekend in Washington, D.C., for disaster aid, including help from the loan program and federal reimbursements to offset the costs to municipalities and the state for snow removal and damage to public infrastructure.
The SBA loans could provide relief not only for physical damages, such as from failing roofs and frozen pipes, but for financial losses triggered when snowbound employees could not take public transportation or drive to get to work.
A wide array of Boston-area businesses — restaurants, retailers, print shops, law firms — have been frustrated in recent weeks as snow piled up and business ground nearly to a halt. The snow derailed MBTA service, snarled vehicle traffic, and turned commutes into hourslong treks.
Even Valentine’s Day dinner reservations ended up being canceled.
As a result, some companies might be struggling to make payroll. But small-business 30-year loans with low interest rates of about 4 percent can provide help, said Michael Lampton, a spokesman for the SBA’s disaster assistance program.
For most companies, the loss of normal business can be among the most difficult costs to recover and usually isn’t reimbursed by insurance. Most insurance policies will cover lost business during a storm only if there is direct damage, such a roof collapse.
Add to that a variety of other exclusions in the fine print of insurance policies and some businesses can find it tricky to claim financial losses from their insurance companies.
Many businesses faced such roadblocks after the Boston Marathon bombings, when insurers rejected claims because the losses had to occur 72 hours after the event.
“We’re able to cover what the insurance hasn’t covered,” Lampton said of the small-business loans, which have been used for hurricanes, tornadoes, and even fires.
The SBA approved more than $332 million in disaster loans nationwide in its last fiscal year.
But because these loans have to be repaid, they might not always be the best option for a business, Judge said.
Companies also have to provide a detailed accounting of their losses by submitting tax information and sales records.
After the Marathon bombings, the small-business agency approved four disaster loan applications for a total of $214,300.
Following the tornado in Revere in July, the agency made eight loans to homeowners and businesses, totaling $181,200.