SBA Disaster Loans - Not Just For Businesses

May 6, 2009 -- LITTLE ROCK, Ark. -- The Federal Emergency Management Agency (FEMA) and the Arkansas Department of Emergency Management want to remind those with damages from the severe storms and tornadoes of April 9 that loans from the U.S. Small Business Administration (SBA) are not just for businesses. The low-interest loans are also available for residents in the disaster-designated counties of Miller, Polk and Sevier counties.

Many homeowners and renters who register for disaster assistance with FEMA will be referred to the U.S. Small Business Administration (SBA) for assistance in the form of a low-interest disaster loan. SBA is the federal government's primary source of money for the long-term repair or rebuilding of disaster-damaged private property that is not fully covered by insurance.

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"It is important that those who receive an SBA application fill it out and return it as quickly as possible, even if they are not interested in a loan," said Federal Coordinating Officer Mike Moore. "Individuals who do not qualify for SBA loans may be referred to other available disaster aid programs and filing an application does not obligate anyone to accept a loan." Failure to complete the SBA loan application received in the mail may stop the process of determining eligibility for other types of disaster assistance including FEMA grants.

If you receive an SBA loan application and need help filling it out, you can meet with an SBA Customer Service Representative at a local Disaster Recovery Center. Also, these representatives are on hand to answer questions about SBA's disaster loan program and explain the application process. If you can't visit a DRC and need help, you can call SBA at 800-659-2955 or TTY 800-877-8339. Applicants may apply online using the Electronic Loan Application (ELA) via SBA's secure Web site at disasterloan.sba.gov/ela. or visit SBA's Web site at www.sba.gov/services/disasterassistance.

SBA offers disaster loans up to $200,000 to homeowners to repair or replace damaged or destroyed real property. Homeowners and renters are eligible to borrow up to $40,000 to repair or replace damaged or destroyed personal property. Interest rates can be as low as 2.87 percent for homeowners and renters and maximum terms can be for as long as 30 years.

Businesses and private non-profit organizations may borrow up to $2 million to repair or replace: damaged or destroyed real estate, machinery and equipment, inventory, and other business assets. Loss of income, known as economic injury, may also be included in a loan.

Source: FEMA