Updated on27 April, 2022
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Provided by the U.S. Small Business Administration (SBA), SBA loans may cover the cost of damage to real estate, inventory, and equipment or general economic injury. SBA disaster loans may be your lifeline if you’re a business owner, homeowner, or renter who needs financial assistance to recover from a declared disaster like a fire, flood, or tornado.
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- Make sure your document filing is meticulous
Most SBA loans are funded through SBA-approved lenders. SBA disaster loans are different as they’re funded directly through the SBA after a declared disaster. SBA disaster loans are low-interest, long-term loans designed to help borrowers get back on their feet after a disaster.
Here are four key types of SBA disaster loans:
These loans offer up to $2 million in funding so that business owners can repair or replace assets. Assets may include property, machinery or equipment, fixtures, inventory, and leasehold improvements.
EIDLs help business owners cover financial obligations they would’ve met if the disaster hadn’t occurred. While the SBA will determine actual economic injury before approving a loan amount, up to $2 million is available.
The SBA offers up to $200,000 to homeowners whose primary residence requires a repair or replacement due to a declared disaster. Homeowners and renters may also borrow up to $40,000 to pay for personal property damage. Typically, these funds cannot be used for home upgrades or additions.
If an employee is a military reservist and called up to active duty, the MREIDL offers up to $2 million in funding to cover operating costs. The actual loan amount granted will depend on business interruption insurance or whether the business has enough funding to operate without the employee.
After you face a disaster, you can apply for an SBA disaster loan online, by mail, or in person at a nearby disaster center. In most cases, you’ll have 60 days after the disaster has been declared to apply for physical damages.
You’ll have nine months to apply for financing for economic injury. The type of SBA disaster loan you apply for will determine the information and documents you’ll need to provide.
Here are common SBA disaster loan requirements:
Here are the key steps involved in the SBA loan application process:
Here are key points to keep in mind when applying for an SBA disaster loan:
While SBA disaster loans can be beneficial, they’re not available to everyone. The good news is there are alternative options like Fora Financial disaster loans. These loans offer an easy application process, fast approvals, and funding in as little as 24 hours so you can recover from the disaster as soon as possible.
They’re also flexible, meaning you may use them to pay for virtually any expense, don’t require collateral, and come with more lenient eligibility requirements than SBA disaster loans. If you find out that you’re ineligible for SBA disaster loans, Fora Financial disaster loans are certainly worth considering.
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