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Who Can Apply for SBA Disaster Loans?

By Robin Enos on May 17, 2011 | Last updated on March 21, 2019

The U.S. Small Business Administration (SBA) offers special SBA disaster loans. With massive flooding striking several states along the Mississippi delta, finding these resources takes on sudden urgency.

These loans are not just for small businesses. And not just in agriculture. They are even available to homeowners and renters, once the President, Secretaries of Agriculture or Commerce, or the SBA declare a disaster.

With the recent Mississippi flooding, FEMA's website lists disaster declarations by area. Since April 19th, FEMA has listed disaster declarations in fourteen states, most along the Mississippi River. In the state of Mississippi, declarations now cover fourteen counties, reports CNN.

So who qualifies for SBA disaster loan assistance?

First, your losses must have occurred in a county covered by a disaster declaration.

Second, FEMA requires that if you have insurance, you must file an insurance claim. If your insurance claim will take longer than 30 days, or your insurance does not cover your disaster damage, you will probably qualify for FEMA aid, including SBA loans.

SBA disaster loans come in four flavors. SBA offers home and personal property loans, business physical disaster loans, economic injury loans, and loans for military reservists.

1. Home and personal property loans are available to homeowners and renters. You may qualify for up to $40,000 in loans for personal property and living expenses, and up to $200,000 for repair of your primary residence. Insurance coverage will be deducted from the damage total, to determine your loan amount.

2. Business physical disaster Loans are available to businesses or non-profits, these SBA disaster loans may total up to $2 million, and may be used to repair or replace real property, machinery, equipment, fixtures, inventory or leasehold improvements. These loans carry a 4% interest rate, a 30-year repayment schedule, and SBA decides if the borrower can get financing elsewhere.

3. Economic injury disaster loans are available to small businesses, agricultural cooperatives and some non-profits, and range up to $2 million for both economic injury (i.e., working capital) and physical damage. These loans carry a 4% interest rate, and the business must be able to repay.

4. Military reservist economic injury loans may be available to help a small business meet ordinary expenses it cannot meet because an essential employee was called to active duty as a reservist. These loans must be applied for within a year of the reservist's call-up.

So, don't wait until the water recedes. You can even apply online to SBA's disaster loan application webpage. And you have to file by the deadline set for applications for SBA disaster loans in your area.

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