As the October wildfires affected businesses both inside and outside the tremendous burn zones, San Diego lenders began gathering their teams, preparing to make emergency loans and offering relief packages to those hardest hit.

San Diego businesses were already dealing with turbulence created by the subprime mortgage mess when wildfires swept through and added another layer of uncertainty.

Long-term, the fires are expected to have a beneficial effect on industries such as construction, which have been hit hard by the housing slump, but in the meantime businesses affected by the blazes face more immediate fix-up and funding concerns.

A survey of local lenders as the fires subsided found most were still waiting to hear from their customers, but some lenders with local offices have launched programs to provide immediate assistance to business clients.

Comerica Bank, with 75 branches statewide and an enlarging footprint in San Diego, has set up an expedited loan program that can make up to $50,000 available in about eight hours.

“We wanted businesses to be able to get access to funding very quickly for situations such as to meet payroll, or to fix equipment to get up and running,” says Betty Tucker, executive vice president for retail banking in Comerica’s Western market. “So we’ve developed a quick process loan of up to $50,000. Applicants will get a decision within eight hours and, if approved, funds shortly thereafter, which is a record on the business level.”

Tucker says the loans are available at all Southern California branches because “a lot of our owners live somewhere else and work or have a business in the affected areas.” A businessperson does not have to be an existing client of the bank to apply for the loan, Tucker adds.

Comerica will open a Point Loma branch this month, giving the Dallas-based bank eight in San Diego and 76 in California. Comerica expects to add branches in Escondido and Hillcrest in the next few months.

“We’re making a huge effort in the Western market, especially in San Diego and Southern California,” says Tucker. “San Diego is a very vibrant market, with very affluent customers.”

In addition, U.S. Bank has developed a special “relief package” to support businesses affected by the fires, including flexibility around credit card and loan payments for current customers, an emergency small business loan up to $25,000, and dedicated customer service reps to assist businesses that have been significantly affected.

U.S. Bank has 1,700 employees and 136 offices in the seven counties impacted by the fires.

The Southern California burn area held more than 3,000 businesses, employing 40,000 workers with a quarterly payroll of $500 million, says the state Employment Development Department. While a quarter of those workers are in the leisure and hospitality sector, the average annual salary for workers living in the fire damaged areas of San Diego County is $51,600.

SBA is also making available loans of up to $1.5 million at a fixed rate of 4 percent for operating expenses or losses not covered by insurance. A list of forms and specific rules can be found at sba.gov/services/disasterassistance/basics/howtoapply/index.html.

Applicants must first register as a disaster victim with the Federal Emergency Management Agency (FEMA). Information will be forwarded automatically to the SBA or applicants can contact the agency directly at (800) 659-2955 or by visiting one of four local assistance centers, including:

• Cuyamaca College, 900 Rancho San Diego Parkway, El Cajon
  
  
• Fallbrook Community Center, 341 Heald Lane, Fallbrook
  
  
• Ramona Community School, 1710 Montecito Road, Ramona
  
  
• Rancho Bernardo-Glassman Recreation Center, 18448 West Bernardo Drive, San Diego

Naturally, any sort of business interruption will send business owners straight to their insurance policies, which ideally were part of an “important papers” portfolio that business owners were able to tuck under their arms as the evacuation orders came.

“We’re seeing a number of claims for business interruption,” says Terry Moore, principal at Barney & Barney. “Most business insurance policies contain a provision for business interruption if a civil authority mandates an evacuation and you incur expenses as a result of that or your business is shut down.”

Moore says this may cover evacuation expenses, such as a hotel room or food for a finite period when the evacuation was in effect. Moore advises businesses to check their policies for this type of coverage.

With fires burning from Malibu to Baja California, San Diego County was the disaster’s epicenter. As many businesses struggle to recover, the government and private sector have stepped forward with programs and advice that can help. (photo/NASA)

Barney & Barney is also evaluating offers of support from the Assurex Network of regional insurance brokers, which Moore expects will result in a donation related to the fire fighting effort.

Since the last major wildfires were only four years ago, it seems unlikely that the 2007 fires will be the last to visit San Diego, so insurance experts say businesses need three plans: a pre-fire evaluation of the risk, an immediate response to a disaster and a longer term recovery plan.

“Ideally, before the accident has happened you have done analysis of your exposure to loss,” says Jeffrey Cavignac of Cavignac & Associates. “You have evaluated what can go wrong, and figured what kind of risk control procedures would reduce the risk, such as installing fire sprinklers and alarms, clearing brush within 50 feet, and so on.”

Another proactive measure is to take a photographic inventory of everything that could be subject to loss.

“Whenever there’s a claim, unless you have done a total inventory, it’s impossible to determine everything that’s in there,” Cavignac says. “To the extent you can justify what was in there and supply that information to a claims adjuster, you will be much better off.”

Even though the policy may cover your loss, the insured must be able to prove the loss to collect. “It is incumbent upon the insured to prove to the insurance company what they lost,” Cavignac explains. “If you say to the insurer, ‘I lost $100,000 worth of stuff and cut me a check,’ they’re going to look at you like you’re crazy.”

Cavignac also recommends that affected business owners:

• Do not alter the condition of the building before it is inspected by the adjuster. However, you can make emergency repairs to prevent further damage.
  
  
• Make temporary repairs to leaking roof and/or pipes. Be sure broken windows are repaired promptly and missing shingles are temporarily replaced or covered to prevent further loss.
  
  
• Prepare an inventory of damaged property. Include a description of all items, including their age and replacement value.
  
  
• Contact your insurance agent to report damage and strategize on a recovery plan with an assigned insurance company adjustor. Document in writing, pictures and video the details of exposures and damages related to the event.
  
  
• Preserve in as good a condition as possible those items being claimed.
  
  
• Gather all original receipts, canceled checks, bank statements, owners’ manuals, photographs and any other documents to support your claim.
  
  
• Secure a detailed estimate of repairs. Track the labor and equipment provided by any service providers or contractors responding to repair your damage.