Posts Tagged ‘Hurricane Ike’

Hurricane Ike’s IT Lessons

Friday, October 3rd, 2008

A Houston business owner contributed a piece to, titled “Hurricane Ike’s IT Lessons”. Click here to read the linked article. The lessons are consistent with what we had written in the first edition of our book in 2002, just after our experience of 9-11, and in the second edition, Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses (Wiley, 2008): build in redundancy, disaster recovery is stressful, simple solutions are best, etc. I would hope that every small business owner would learn these lessons the easier, rather than the hard way, so please read another person’s view to take the message to heart!

Get Some Breathing Room

Thursday, October 2nd, 2008

With all of the reports in the news about the difficulties small businesses face in accessing credit, the bigger story is overlooked. Many small businesses contract with the federal government for net payment terms of 30 days on submission of an approved invoice. The federal government is stretching its payments out to 140 – 150 days, in effect, extracting interest-free financing from small business suppliers. Even worse, if the small business is the prime contractor, it must pay its sub-contractors even before it receives payment from the federal government. The Fortune-500 are also stretching out payments, although not to that extreme. Being an unwilling creditor is a more serious problem than being unable to access credit.

And with that happy thought, I would like to suggest that residents in the Houston-Galveston area in the wake of Ike begin to negotiate longer payment terms, reductions in interest rates or any other forbearance that they can with their creditors. In disaster recovery mode, everything takes longer than you think it will. Try to negotiate some breathing room for yourself while the powerful images of the disaster give you some negotiating leverage or sympathy. It is better to negotiate early in the process then when your accounts go into arrears and blemishes start to appear on your credit report. And it will reduce your stress level.

Residents Affected by Hurricanes Gustav and Ike to Benefit from FEMA Housing Assistance

Wednesday, October 1st, 2008
FEMA and HUD promise housing assistance

FEMA and HUD promise housing assistance

The Department of Housing and Urban Development has joined with the Federal Emergency Management Agency to announce a housing assistance program for residents affected by Hurricanes Gustav and Ike. For more information about this program, click here to see the FEMA press release. The program appears to have much in common with FEMA’s Mortgage and Rental Assistance Program that was in effect during the 9/11 disaster, although it differs in some key respects to the assistance offered in the aftermath of Hurricane Katrina. Here are two tips from the experience of 9/11:

1. As I recommended in Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses (Wiley, second edition, 2008), always use a Certificate of Mailing for any correspondence with your insurance company or any relief agency. This is different from sending a letter via registered or certified mail in which the recipient must sign to acknowledge receipt of the letter or package. With a Certificate of Mailing, the recipient’s signature is unnecessary; it is the post office that provides certification of the date and time of the mailing. Why is this distinction important? Consider what happened in the aftermath of 9/11 to Lower Manhattan residents who were directed to mail their applications for the FEMA Mortgage and Rental Assistance Program to a designated post office box address for processing. Applications were not accepted through other channels. Weeks and months passed and residents wondered what had happened with their applications. As it turns out, FEMA had not paid the rent on its post office box. If the post office would have returned the undeliverable applications to the senders, the problem could have been detected earlier. But one error compounded another and the post office staff simply piled up the undeliverable applications in a back room. The Certificate of Mailing would have proved that the applicants met their deadlines irrespective of the problems on the recipient’s end, that is one of the reasons that I recommend its use. By the way, the book incorrectly states that the cost of the Certificate of Mailing is $0.60. It was $0.60 at the time I submitted the manuscript for the book, but it has since risen to $1.10, which is still a good value.

2. The information that FEMA and HUD have released indicates that benefits will be paid three months at a time. If they will process the benefits for this program as they did for the Mortgage and Rental Assistance Program, they will electronically deposit the funds in the recipient’s bank account. Given the economic difficulties and credit pressure, it is very likely that there are applicants in the Gulf Coast who may have judgments against them. In such a case, it would be better to set up a separate account for receipt of the electronic funds from which the rent or mortgage expense could be paid. An attorney with the 9/11 Project of the New York Legal Aid Society had informed me of an instance in which one of her clients had commingled his FEMA housing assistance money with other funds in his account and the FEMA money was garnished by a creditor. If you may be facing this risk, it is better not to take a chance. Use a separate account.