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Natural Disasters

Natural disasters are a major threat to the viability of small businesses, particularly in vulnerable communities. Some firms are indirectly affected, facing challenges due to disruptions in supply chains across the country. Other firms are directly in the path of major weather events, ranging from deep freezes and severe storms to wildfires and hurricanes. According to the National Oceanic and Atmospheric Administration, there were 18 weather-related events in the US that each caused $20 billion in damage in 2022 alone, totaling $400 billion. In 2021, the damage was even greater.

The Small Business Credit Survey includes an end-of-survey module on the effects of natural disasters and the way in which firms cope with any resulting losses. The survey data show that more than 1 in 10 small employer businesses suffer losses from a natural disaster in a given year, and those affected are often left in worse financial condition than unaffected businesses.