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U.S. Small Business Administration (SBA) Disaster Loan Assistance

SBA provides low-interest disaster loans to businesses of all sizes, private non-profit organizations, homeowners, and renters. SBA disaster loans can be used to repair or replace the following items damaged or destroyed in a declared disaster: real estate, personal property, machinery and equipment, and inventory and business assets.

SBA Disaster Loan FACT SHEET: https://disasterloan.sba.gov/ela/Documents/Three_Step_Process_SBA_Disaster_Loans.pdf

The Loan Application Process is an on line 3 STEP PROCESShttps://disasterloan.sba.gov/ela/Account/Login

TYPES OF DISASTER LOANS:

A) Business Physical Disaster Loans

If you are in a declared disaster area and have experienced physical damage to your business, you may be eligible for financial assistance from the SBA. Businesses of any size and most private nonprofit organizations may apply to the SBA for a loan to recover after a disaster.

Loan Amounts and Use

SBA makes physical disaster loans of up to $2 million to qualified businesses or most private nonprofit organizations. These loan proceeds may be used for the repair or replacement of the following:

  • Real property
  • Machinery
  • Equipment
  • Fixtures
  • Inventory
  • Leasehold improvements

THE SBA BUSINESS PHYSICAL DISASTER LOAN COVERS DISASTER LOSSES NOT FULLY COVERED BY INSURANCE. If you are required to apply insurance proceeds to an outstanding mortgage on the damaged property, you can include that amount in your disaster loan application.

If you make improvements that help reduce the risk of future property damage caused by a similar disaster, you may be eligible for up to a 20 percent loan amount increase above the real estate damage, as verified by the SBA.

You may not use the disaster loan to upgrade or expand a business, except as required by building codes.

Eligibility and Terms

A business of any size or most private nonprofit organizations located in a declared disaster area and have incurred physical damage during the disaster, may apply for a loan to help replace damaged property or restore its pre-disaster condition.

The interest rate will not exceed 4 percent if you cannot obtain credit elsewhere. For businesses and nonprofit organizations with credit available elsewhere, the interest rate will not exceed 8 percent. SBA determines whether the applicant has credit available elsewhere. Repayment terms can be up to 30 years, depending on your ability to repay the loan.

How to Apply

You can apply online for an SBA disaster assistance loan. SBA will send an inspector to estimate the cost of your damage once you have completed and returned your loan application.

You must submit the completed loan application and a signed and dated IRS Form 4506-T giving permission for the IRS to provide SBA your tax return information.

B) Economic Injury Disaster Loans

If you have suffered substantial economic injury and are one of the following types of businesses located in a declared disaster area, you may be eligible for an SBA Economic Injury Disaster Loan (EIDL):

  • Small Business
  • Small agricultural cooperative
  • Most private nonprofit organizations
  • Loan Amounts and Use

Substantial economic injury means the business is unable to meet its obligations and to pay its ordinary and necessary operating expenses. EIDLs provide the necessary working capital to help small businesses survive until normal operations resume after a disaster.

The SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. Your loan amount will be based on your actual economic injury and your company’s financial needs, regardless of whether the business suffered any property damage.

Eligibility and Terms

The interest rate on EIDLs will not exceed 4 percent per year. The term of these loans will not exceed 30 years. The repayment term will be determined by your ability to repay the loan.

EIDL assistance is available only to small businesses when SBA determines they are unable to obtain credit elsewhere.

A business may qualify for both an EIDL and a physical disaster loan. The maximum combined loan amount is $2 million.

How to Apply

You can apply online for an SBA disaster assistance loan.

You must submit the completed loan application and a signed and dated IRS Form 4506-T giving permission for the IRS to provide SBA your tax return information.

C) Home and Personal Property Loans

If you are in a declared disaster area and have experienced damage to your home or personal property, you may be eligible for financial assistance from the SBA — even if you do not own a business. As a homeowner, renter and/or personal property owner, you may apply to the SBA for a loan to help you recover from a disaster.

Loan Amounts and Use

Homeowners may apply for up to $200,000 to replace or repair their primary residence. The loans may not be used to upgrade homes or make additions, unless required by local building code. If you make improvements that help prevent the risk of future property damage caused by a similar disaster, you may be eligible for up to a 20 percent loan amount increase above the real estate damage, as verified by the SBA.

In some cases, SBA can refinance all or part of a previous mortgage when the applicant does not have credit available elsewhere and has suffered substantial disaster damage not covered by insurance.

Renters and homeowners may borrow up to $40,000 to replace or repair personal property — such as clothing, furniture, cars and appliances — damaged or destroyed in a disaster.

Eligibility and Terms

Secondary homes or vacation properties are not eligible for these loans. However, qualified rental properties may be eligible for assistance under the SBA business disaster loan program.

Proceeds from insurance coverage on your home or property will be deducted from the total damage estimate to determine the eligible loan amount. The SBA is not permitted to duplicate any benefits.

For applicants unable to obtain credit elsewhere, the interest rate will not exceed 4 percent. For those who can obtain credit elsewhere, the interest rate will not exceed 8 percent. The SBA will determine whether an applicant can obtain credit elsewhere. SBA disaster loans are offered with up to 30-year terms.

Home loans for more than $25,000 in Presidential and Agency declarations must be secured with collateral to the extent possible. The SBA will ask the applicant for available collateral but will not decline a loan for lack of collateral. A first or second mortgage on the damaged real estate is commonly used as collateral for an SBA disaster loan.

How to Apply

You can apply online for an SBA disaster assistance loan. SBA will send an inspector to estimate the cost of your damage once you have completed and returned your loan application.

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