What is an SBA Disaster Loan?
This low-interest and long-term loan is provided to businesses of all sizes and types to repair or replace disaster-damaged property. SBA disaster loans offer a reasonable way for small business owners to recover from declared disasters.
An SBA disaster loan can help you meet the necessary financial obligations and allow you to maintain sufficient money during the period affected by the disaster. However, it doesn’t replace lost sales or revenue.
There are several types of disaster loans such as Economic Injury Disaster Loans (EIDL), Business Physical Disaster, Express Bridge Loan Pilot Program, and Military Reservists Economic Injury. You can use one or multiple loans at the same time to meet your current financial needs.
Features of SBA Disaster Loans
Loan Amount
Up to $2 million
Interest Rate
4% to 8%
Repayment Terms
Up to 30 years
Minimum Requirements
· Must have 660 or above credit score
· Business must be located in an SBA declared disaster area
· Business must have suffered physical or economic damage from a disaster
Time to Funding
At least 30 to 90 days
Fees
Application fees, late payment fees, and liquidation costs
Collateral
Lenders are not required to take collateral for these loans
Qualification Requirements of an SBA Disaster Loan
First and foremost, your business must operate in an area where the SBA makes a disaster declaration. If your business has experienced some type of damage due to a declared disaster, you can be eligible for this affordable small business financing. Generally, this is one of the most important requirements to determine your eligibility. You can see the list of currently declared disasters on the SBA website – which can include events such as earthquakes, tornadoes, virus outbreaks, and other natural disasters.
You also need to meet the following common requirements for different SBA disaster types especially if obtaining loans for your business.
Business Physical Disaster Loans
Businesses of any size and non-profit organizations who can obtain credit elsewhere still can qualify. In this type of loan, you’re given a lump sum of cash to replace or repair your business property that is damaged in a declared disaster.
Economic Injury Disaster Loans
Small businesses, non-profit organizations, and small agricultural cooperatives that have been affected by a declared disaster can qualify. With EIDL, you can get the working capital to meet financial obligations and operating expenses in the time of a disaster.
How to Apply for an SBA Disaster Loan?
You can apply for an SBA disaster loan online, by email, or in-person. For the easiest and fastest application process, filling out the online application form through the SBA website could be a great idea. Besides, you can complete a paper application and submit it by email or apply in-person at any Disasters Recovery Center.
Documents Needed to Apply for an SBA Disaster Loan
- Employer Identification Number
- SBA Form 5
- Personal financial statements
- Profit and loss statement
- Most recent Federal income tax returns
- SBA Form 413
- Additional documentation may be requested, such as monthly sales figures, deed/lease information, income statements, legal documents, etc
If your business has been severely affected by a disaster or the COVID-19 pandemic, it’s a smart idea to apply for an SBA disaster loan. Research and compare your options using an online funding marketplace and don’t hesitate to apply for an SBA disaster loan to help your small business survive the economic impact of the disaster at hand.
Small Business Administrative helps with low-interest disaster loans to small business owners in US.
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