THE BAD DEAL

Dear Restaurants: President Obama has declared a state of disaster in New York, New Jersey and many of the areas where Hurricane Sandy struck, so you might be eligible for up to $2 million total in emergency low-interest loans for losses not fully covered by your insurance program. 

If you don’t have enough money to run your restaurant or if you can’t operate your restaurant because of physical damage, these loans might be able to help. The interest rates on these loans won’t exceed four percent. 

These loans by the U.S. Small Business Administration cover physical damage (i.e. to pay for broken equipment, destroyed machinery, lost inventory), and/or economic damages, (i.e. “to maintain a working capital position during the period affected by the disaster”). 

Physical damage loans cover both un-insured and underinsured property. The economic injury disaster loans can help businesses meet obligations that would have been otherwise met had the disister not occurred. The economic injury loans are only for small businesses that can’t obtain credit elsewhere. 

The exact rates, of course, depend on your ability to obtain credit elsewhere. You can read more about these loans at the Small Business Administration website. You can apply electronically online. Is this a GOOD DEAL or a BAD DEAL? We certainly can’t say as you’ll have to crunch the numbers yourself and find out what the best source of financing is, but consider it hopefully one of many options.