Businesses, Nonprofits Can Seek Low-interest Disaster Loans to Aid Recovery

AUSTIN, Texas – Businesses and nonprofit organizations that sustained damage or losses from the May-June storms and floods can apply for a low-interest disaster loan from the U.S. Small Business Administration to help with their recovery.

“SBA disaster loans are the major source of federal disaster recovery aid,” said Federal Coordinating Officer William J. Doran III, who is in charge of FEMA’s operations in Texas. “The interest rates are low—as low as 4 percent for businesses and 2.625 percent for nonprofits for the life of the loan.”

SBA offers two types of disaster loans to businesses, small agricultural cooperatives, aquaculture and most nonprofits, including faith-based ones: physical disaster loans and economic injury disaster loans.

Physical disaster loans are used to repair or replace damaged buildings and business assets. Economic injury disaster loans help small businesses, small agricultural cooperatives, aquaculture businesses and most private nonprofits meet financial obligations they cannot meet because of the disaster.

Business owners may also be eligible to refinance existing liens or mortgages.

SBA low-interest disaster loans for businesses have several advantages:

• SBA requires no collateral for both physical loans or economic injury loans less than $25,000. SBA requires the borrower to pledge as collateral only what is available, plus satisfactory credit and the ability to repay.
• Applicants don’t have to wait for insurance settlements to obtain loans.
• Loans are written for a length of time appropriate to the type of loan, but SBA may make adjustments in the length of the loan to lower the monthly payments. Loan amounts and terms are set by SBA and are based on each applicant’s financial condition.
• SBA offers mitigation loans to help pay for improvements to reduce potential for future damage. These mitigation funds are available for up to 20 percent of the total amount of disaster damage.
• SBA never charges an application fee or points for its disaster loans.

By law, SBA business loans cannot exceed $2 million.  If a business is a major employer, SBA may waive the limit.

The deadline to file for a physical damage disaster loan is August 10. The deadline for an economic injury disaster loan is March 11, 2017.

No one is obligated to accept a loan if approved. SBA gives applicants six months to decide whether to accept a loan.

Applicants may apply online using the electronic loan application via SBA’s secure website at DisasterLoan.sba.gov/ela.

Disaster loan information, application forms and a list of counties eligible for assistance are available online at SBA.gov/disaster, from SBA’s Customer Service Center at 800-659-2955 or by emailing DisasterCustomerService@sba.gov. Individuals who are deaf or hard of hearing may call 800-877-8339.

SBA representatives are also available at disaster recovery centers to provide information about disaster loans, the application process or help completing an SBA application. To find the nearest one, go online to the disaster recovery center locator at asd.fema.gov/inter/locator.

Completed applications can be mailed to:
U.S. Small Business Administration
Processing and Disbursement Center
14925 Kingsport Rd.
Fort Worth, TX  76155

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FEMA’s mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.