Don’t Wait for Insurance Settlement to Apply for an SBA Loan

NEW YORK – Survivors should not wait to settle with their insurance companies before applying for Small Business Administration disaster loan assistance. FEMA and the SBA encourage survivors of Hurricane Sandy in eligible New York counties to return their completed applications, even if they have not settled with their insurance company.

If a survivor does not know how much of their loss will be covered by insurance or other sources, SBA will consider making a loan for the total loss up to its loan limits, provided the borrower agrees to use insurance proceeds to reduce or repay their SBA loan. 

“Your insurance policy may not cover all the replacement, repair and rebuilding costs – and the disaster loan is available to cover the difference.  You don’t have to wait for an insurance settlement, though.  If the insurance money covers damage that you’ve borrowed for, the overlap can be used to pay down the loan,” said Frank Skaggs, Director of SBA Field Operations Center East. 

Disaster home and business loans are available to repair or replace disaster-damaged property, including contents.  Economic Injury Disaster Loans are available for small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private non-profit organizations of all sizes having difficulties meeting operating expenses because of the disaster. 

Interest rates are as low as 1.688 percent for homeowners and renters, 3 percent for non-profit organizations and 4 percent for businesses with terms up to 30 years.  Loan amounts and terms are set by the SBA and are based on each applicant’s financial condition. 

“Our partnership with SBA is very important because they are a key step in recovery process,” said New York Federal Coordinating Officer Michael F. Byrne. “Survivors should make it a priority to return their application to SBA because even if they do not qualify for a loan, they may be eligible for other assistance.”

SBA customer service representatives are available to issue or accept low-interest disaster loan applications and answer questions at all New York State/FEMA disaster recovery centers and 19 SBA business recovery centers. To find the nearest disaster recovery center, check out the disaster recovery center locator at www.FEMA.gov/disaster-recovery-centers or, with a tablet or smartphone, go to m.fema.gov. You may also text “DRC” and your Zip Code to 43362 (4FEMA). For example, if you lived in Staten Island, you would text: “DRC 10301.” If you use a TTY, call 800-462-7585 directly; if you use 711 or Video Relay Service (VRS), call 800-621-3362. To locate the nearest business recovery center, visit www.sba.gov or call 800-659-2955 (TTY 800-877-8339.) 

Applicants may also apply online using the Electronic Loan Application via SBA’s secure website at https://DisasterLoan.SBA.gov/ELA. More information is available by calling the SBA Disaster Customer Service Center toll-free number, 800-659-2955 (TTY 800-877-8339.) Assistance is also available by sending an email to DisasterCustomerService@sba.gov or by visiting www.sba.gov.

For more information on New York’s disaster recovery, visit www.fema.gov/SandyNY, http://twitter.com/FEMASandy, www.facebook.com/FEMASandy and www.fema.gov/blog.