U.S. Senators Marco Rubio (R-FL), Angus King (ME-I), Ben Cardin (D-MD), John Kennedy (R-LA), Ron Wyden (D-OR), Susan Collins (R-ME) and Joni Ernst (R-IA) introduced the Providing Resources for Emergency Preparedness and Resilient Enterprises (PREPARE) Act, according to the National Marine Manufacturers Association website. This bipartisan legislation, which matches companion legislation in the U.S. House of Representatives, would allow the Small Business Administration (SBA) to make low-interest, fixed rate loans of up to $500,000 to small businesses to invest in their properties to protect their facilities, real estate and contents from natural disasters.
According to FEMA, roughly 40-60 percent of small businesses never reopen following a disaster. Research shows that every $1 the government spends on disaster mitigation, such as improving existing infrastructure or elevating homes and businesses, saves taxpayers an average of $6—something that is particularly important at a time when the economic impact of disasters has cost the U.S. over $800 billion in the last decade.
The Senate’s PREPARE Act, which builds upon similar legislation (H.R. 7552) introduced by U.S. Representative Joseph Morelle (D-NY):
- Creates an updated Pre-Disaster Mitigation Program for small business concerns to proactively take out a low-interest loan (up to $500,000) for the purpose of implementing mitigation measures to protect their property from future disaster related damage.
- Authorizes $25 million annually (FY2021 to FY2025).
- Tasks SBA with establishing and carrying out an advertising and outreach program related to pre-disaster mitigation.
- Tasks SBA with issuing guidance to ensure borrowers purchase and maintain insurance coverage over the duration of the loan.
- Requires SBA to conduct initial reporting and a program evaluation annually thereafter.
- Increases, from 20 to 30 percent, the limit on existing SBA Physical Business Disaster Loans a borrower may use towards post-disaster mitigation.
If passed, this landmark legislation would significantly increase the tools that small business owners have at their disposal to prepare their facilities for natural disasters and would be the only SBA program focused solely on small business disaster prevention. The PREPARE Act would also take steps to expand SBA’s Disaster Loan program to provide more resources for disaster mitigation when repairing and rebuilding private sector disaster losses.