Business Physical Disaster Loans
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.
Businesses and private non-profit organizations of any size may borrow up to $2 million to repair or replace disaster damaged or destroyed real estate, machinery and equipment, inventory, and other business assets . In some cases, SBA may be able to refinance all or part of a previous mortgage or lien. Loans may also be increased up to 20 percent of the total amount of disaster damage to real estate and/or leasehold improvements, as verified by SBA, to make improvements that lessen the risk of property damage by possible future disasters of the same kind.
For small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private non-profit organizations of all sizes, the SBA offers Economic Injury Disaster Loans (EIDL) up to $2 million to help meet working capital needs caused by the disaster. EIDL assistance is available regardless of whether the business suffered any physical property damage.
The statutory limit for business loans is $2 million and applies to the combination of physical, economic injury, mitigation and refinancing, and applies to all disaster loans to a business and its affiliates for each disaster.
General Program Requirements
In order to qualify for this benefit program, your business or private non-profit organization must have sustained physical damage and be located in a disaster declared county.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.
