MONTGOMERY, Ala. – Some disaster survivors think that U.S. Small Business Administration loans are only for businesses. That is not the case – it is the primary source of federal funds for long-term recovery assistance for disaster survivors.
SBA offers disaster loans at rates as low as 2.188 percent to homeowners and renters, at 4 percent for businesses of all sizes and at 2.625 percent for private nonprofit organizations for physical damage from the April 28 through May 5 severe storms, tornadoes, straight-line winds and flooding in the following Alabama counties: Baldwin, Blount, DeKalb, Etowah, Jefferson, Lee, Limestone, Mobile and Tuscaloosa counties.
Economic injury disaster loans also are available to provide working capital to eligible small businesses and nonprofit organizations located in the counties listed above and the adjacent counties.
There are good reasons for FEMA applicants who have been contacted by SBA to submit a completed disaster loan application before the July 1, 2014 deadline. Reasons include:
A future insurance settlement may fall short. Survivors may find out they are underinsured for the amount of work it takes to repair or replace a damaged home. An SBA low-interest loan can cover the uninsured costs. By submitting the loan application, survivors may have loan money available when it is needed. SBA can approve a loan for the repair or replacement of a home up to $200,000. The loan balance will be reduced by a survivor’s insurance settlement. However, the opportunity for an SBA disaster loan will be lost if they wait until after the application deadline.
SBA can help renters repair or replace disaster damaged personal property. Renters as well as homeowners may borrow up to $40,000 to repair or replace clothing, furniture, appliances and damaged vehicles.
By submitting an SBA loan application, survivors keep the full range of disaster assistance available as an option. SBA may refer applicants who do not qualify for a home loan to FEMA for “Other Needs” grants to replace essential household items, replace or repair a damaged vehicle, cover medical, dental and funeral expenses and other serious disaster-related needs. But if survivors do not submit their disaster loan applications, the assistance process stops. Survivors are not required to accept a loan offer.
Survivors who have not yet registered with FEMA can do so online at DisasterAssistance.gov with a mobile device at m.FEMA.gov or by calling the FEMA helpline at 800-621-3362 (FEMA). TTY 800-462-7585.
The deadline to register for disaster assistance and an SBA loan is July 1, 2014 for property damage. The deadline for Economic Injury Disaster Loans is February 2, 2015.
The Federal Emergency Management Agency and the U.S. Small Business Administration offer assistance programs for homeowners, renters, and business owners in nine Alabama counties designated for Individual Assistance.