Sometimes the news seems to be rife with all sorts of disasters, including wildfires, hurricanes, and even volcanoes. Such disasters can be especially troubling for business owners. However, to help provide relief, the U.S. Small Business Administration, or SBA, offers long-term low-interest loans not only to businesses and private non-profit organizations but also to renters and homeowners. Here is what you need to know about obtaining an SBA disaster loan when you need one.
What Constitutes a Disaster
The SBA offers disaster loans to businesses and individuals that have experienced economic or physical damage in declared disaster areas. To find out if the disaster in which you have sustained damage is in an area that qualifies you for relief, check out the database on the SBA website, in which you can locate qualifying declared disasters by state and territory. You can use the funds from an SBA disaster loan to repair or replace equipment, machinery, inventory, real estate, business assets, and personal property.
Types of Loans
There are several types of disaster loans the SBA offers. For instance, Business Physical Disaster Loans provide you with up to $2 million to repair or replace the property that has sustained damage. Home and Personal Property Loans are available to individuals who have been victims of disasters. Military Reservists Economic Injury Loans assist businesses whose needed employees have been called up from reserve to active military duty. Economic Injury Disaster Loans help businesses that have not sustained property damage but have been damaged economically by disasters.
How to Apply
If a disaster has been declared in your area, the first step is to register with FEMA, the Federal Emergency Management Agency. You can then fill out an application on the SBA website or submit a paper application by mail. The documentation you will need includes your FEMA registration number, Employer Identification Number (for businesses), contact information, social security numbers, insurance information, financial information, and deed or lease information. Once your application is reviewed, an SBA inspector will visit the site to assess the damage. The SBA prioritizes these loans, so you will generally hear back promptly.
For more advice on SBA disaster loans, contact Third Bay Capital.