While most people think that the SBA only helps small businesses, in times of disaster, low-interest disaster loans can help businesses of any size, homeowners and renters affected by a disaster.
Homeowners can receive up to $200,000 for the repair or replacement of real property. Homeowners and renters can borrow up to $40,000 to repair or replace personal property. Loan amounts cannot exceed the uninsured disaster loss, as verified by SBA.
What should I do if I am referred to SBA?
FEMA can refer you to SBA if your income meets the minimum lending guidelines. If you are referred to the SBA for a disaster loan, it is important that you take the time to apply. To receive further assistance from FEMA, you must be denied a loan.
If an SBA loan doesn’t cover all of your needs, you may be eligible for an additional FEMA grant to replace essential household items, replace or repair a damaged vehicle, cover storage expenses, or meet other disaster-related needs.
You are not required to accept a disaster loan. FEMA will help applicants who decline an SBA loan with referrals to community partners such as community and volunteer agencies to help with disaster needs.
Types of loans
There are three types of loans for homeowners or renters and small businesses:
- Home Disaster Loans — Application Deadline is September 28, 2022: Loans to homeowners or renters to repair or replace disaster-damaged real and personal property, including automobiles.
- Business Physical Damage Disaster Loans — Deadline to apply is September 28, 2022: Loans of up to $2 million to businesses to repair or replace disaster-damaged business assets, including real estate, inventory, supplies , machinery and equipment. Businesses of any size are eligible. Private non-profit organizations such as charities, churches, private universities, etc. are also eligible.
- Economic Injury Disaster Loans (EIDL) — Application deadline is May 1, 2023: Working capital loans to help small businesses, small agricultural cooperatives, small aquaculture businesses, and most private nonprofit organizations of all sizes to meet their ordinary and necessary financial obligations that they are unable to meet as a direct result of the disaster. These loans are intended to help during the disaster recovery period.
Military Reservist Economic Injury or Disaster Loan Program
The purpose of the Military Reservist Economic Injury Disaster Loan (MREIDL) Program is to provide financial assistance to eligible small businesses that need help because an essential employee was called into combat. as a military reservist. These loans are intended only to provide the amount of capital necessary for a small business to pay its necessary obligations until business operations return to normal after that essential employee returns from duty as a military reservist. The purpose of this type of loan is not to cover lost income or earnings. MREIDL loan proceeds cannot be used to pay off business debt, refinance long-term debt, or expand a business.
Program requirements
Federal law requires the US Small Business Administration (SBA) to determine whether a credit needed to achieve full recovery is available from a non-government source without negative financial impact on the applicant. The law calls this credit available from other sources. While this type of loan is subsidized by taxpayers, Congress mandated that applicants who have the financial ability to pay for their own recovery must do so, and therefore are not eligible for this assistance.
Credit requirements: The assistance provided by the SBA is in the form of loans, so the agency must have reasonable assurance that such loans can be repaid.
Collateral Requirements: Collateral is required for all MREIDL loans over $50,000. The SBA accepts real property as collateral when it is available. The SBA will not deny a loan for lack of collateral, but will require the borrower to pledge collateral that is available to them.
