Program Description
The U.S. Small Business Administration (SBA) is responsible for providing affordable, timely and accessible financial assistance to private, non-profit organizations and businesses of all sizes located in a declared disaster area. Financial assistance is available in the form of low-interest, long-term loans for losses that are not fully covered by insurance or other recoveries.
SBA's disaster loans are the primary form of Federal assistance for the repair and rebuilding of non-farm, private sector disaster losses. The disaster loan program is the only form of SBA assistance not limited to small businesses.
Business Physical Disaster Loans can provide a private, non-profit organization or business of any size with up to $2 million (actual loan amounts are based on amount of uncompensated damage) to repair or replace real property, machinery, equipment, fixtures, inventory, and leasehold improvements. In addition, disaster loans to repair or replace real property or leasehold improvements may be increased by as much as 20 percent of the verified loss to protect the damaged property against possible future disasters of the same type.
Loan Terms
Disaster survivors must repay SBA disaster loans. SBA can only approve loans to applicants with a reasonable ability to repay the loan and other obligations from earnings. The terms of each loan are established in accordance with each borrower's ability to repay. The law gives SBA several powerful tools to make EIDLs affordable: low fixed interest rates and long-terms (up to 30 years). As required by law, eligibility is based on SBA's determination of whether each applicant does or does not have the ability to borrow or use their own resources to overcome the disaster.
The SBA can provide up to $2 million in disaster assistance to a business. The $2 million loan cap includes both physical disaster loans and EIDLs. There are no upfront fees or early payment penalties charged by SBA.
