Physical Disaster Loan Eligibility

Any business or private, nonprofit organization that is located in a declared disaster area and has incurred damage during the disaster may apply for a loan to help replace damaged property or restore it to the condition it was in before the disaster. If your business or private, nonprofit organization - large or small - has suffered physical damage as a result of a disaster, you may be eligible for financial assistance from the U.S. Small Business Administration. SBA makes physical disaster loans of up to $2 million to qualified businesses or private, nonprofit organizations.

Proper Use of Physical Disaster Loan Proceeds

Physical Disaster Loan proceeds may be used for the repair or replacement of the following:

• Real property

• Machinery

• Equipment

• Fixtures

• Inventory

• 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 total amount of disaster damage to real estate and/or leasehold improvements as verified by SBA to protect the damaged real property against possible future disasters of the same type.

SBA loans cover uninsured and under-insured physical damage. If you are required to apply insurance proceeds to an outstanding mortgage on the damaged property, you can include that amount in your disaster loan application.

Interest Rates on Physical Disaster Loans

The interest rate is determined by your ability to obtain credit elsewhere (from non-federal sources).

The interest rate on both these loans will not exceed 4 percent if you do not have credit available elsewhere. Repayment can be up to 30 years, depending on the business’s ability to repay the loan. For businesses and nonprofit organizations with credit available elsewhere, the interest rate will not exceed 8 percent. SBA determines whether the applicant has credit available elsewhere.

Application Information

Businesses may apply directly to the SBA for possible assistance. SBA will send an inspector to estimate the cost of your damage once you have completed and returned your loan application.

SBA now offers you the option of filing your business disaster loan application electronically. Downloadable application forms are available at: Apply for Assistance.

For additional information, please contact our Customer Service Center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail disastercustomerservice@sba.gov.