Opportunities for Economic Recovery for Local Businesses
The Disaster Recovery Resilience Rebuilding Program (DRR) recognizes the effect that a disaster has on local economies. The loss of multiple businesses and commercial activity in the wake of a disaster can significantly hinder a community’s ability to recover. Assisting a local economy to bounce back quickly after a disaster can be one source of hope for recovery of the wider community. Economic Recovery Program assistance may provide local business owners with operating capital in the case of business interruption or funds to cover costs associated with building back a more resilient commercial property. As with all three DRR programs, the economic recovery program is not intended to fill the entire financial gap a business may have; but to provide grants or loans to cover a portion of the unmet need. The DRR program may provide grants or loans to address a portion of specified unmet needs that remain after all other state, federal or local funding sources for that disaster have been exhausted.
Eligibility
Eligible Economic Recovery Expenses include:
- Direct costs of repairs or reconstruction of a damaged or destroyed commercial (or industrial) building, including costs to rebuild to an advanced fire or other natural hazard mitigation standard;
- Architectural, engineering, permitting or other soft costs/feeds associated with repairing or rebuilding commercial (or industrial) structures;
- Soil sampling and air quality monitoring;
- Clearance and demolition costs including concrete removal and removal of hazardous materials including asbestos;
- Loss of operating funds including: lost sales and revenues that would have been earned if the fire had not happened; temporary relocation or evacuation from an inaccessible property; expenses of working from a temporary location and advertising the move; the costs of maintaining utility service to a partially damaged property; ongoing rent payments for a fire-damaged property, etc.;
- Equipment and inventory;
- Costs associated with using building and site design measures that reduce risk to natural hazards including fire resistant building materials and landscape design;
- Costs to replant climate ready landscaping;
- Costs to train staff to undertake new/improved tasks necessary for the company to continue operations post-disaster; and
- Other recovery costs not covered by other sources that will increase resilience to future disasters.
How to Apply
Eligible Economic Recovery Applicants include:
- Independent contractors, sole proprietors and partnerships
- Incorporated businesses including LLCs, LLPs, S-Corporations and C-Corporations
- Non-profits
Businesses must have been in operation at the time of the disaster and been registered with the Colorado Secretary of State’s office with a Certificate of Good Standing. New businesses established specifically to respond to an ongoing disaster need (i.e. transportation services for displaced residents, food delivery, construction related services, etc.) may be considered for start-up assistance on a case-by-case basis.
Application Process
All applicants will be required to complete an eligibility screening process. This process may be through a local partner, a third party administrator, or with state resources. The administration of the application process will vary according to factors such as the scope of the disaster, the unmet needs associated with the disaster, and the potential volume of applicants.
Available Assistance
At DRR Program inception, no allocation was made to fund the Economic Recovery Program. Allocation and assistance levels will be determined through review of available funding and the unmet need for particular disasters.
Underwriting
All award applicants must meet the following minimum underwriting criteria:
- A reasonable expectation of repayment based on character assessment;
- Adequate current and/or projected debt coverage ratio (including all new debt service);
- Personal guarantee of full loan amount is required for all business owners;
- That project costs are reasonable;
- That all other sources of project financing are committed;
- Documentation of need and that funds are not substituted for other existing support including federal grants and loans (i.e. SBA loans);
- That the project is financially feasible;
- That to the extent practicable, the return on the applicant’s equity investment will not be unreasonably high; and
- Collateral as necessary.
Additional Specifications
The DRR program assistance cannot exceed the unmet needs gap. Gap is based on a standard of eligible expense costs that are approved during the application review process - less any assistance already received including insurance payments and other disaster-related grants or loans provided by federal, state or local sources including non-profits and direct donations.