In time of calamity, like during storms, demand for everything increases dramatically. However, the buying power of the people is actually lessened because of the property damage that people experience. Thus, despite the increased need for these items, fewer people can afford to purchase them. Suppose the average household has US$24,000 a year income prior to a calamity. After suffering a US$12,000 worth of calamity damage, the total yearly income becomes only US$12,000 a year or US$1,000 per month, since all households will need to set aside money for recovery. This effectively slashes the affordability of people by 50%.
Using earlier computations, lowering prices can actually produce the same or more total profit before the calamity occurred. Also, these same computations will require increased production which means more jobs for those that were affected by the calamity. Thus, calamity recovery is hastened with reduced prices. Thus, Small Business Financing can really help businesses in a calamity and the community in general. Business Finance loans will reduce income for a short period but the service it does to businesses and communities will offset the costs in the long run. Thus, Small Business Finance loans is good business risk in any calamity.