Gary Colton joined us at LARC’s Full Committee Meeting on Wednesday 7/22/15 and shared information about the SBA Disaster Loan Programs for home owners, renters, and businesses impacted by the May 5th – June 22nd disasters (see enclosures).
Businesses may qualify for up to $2 million in loans to repair or replace damaged buildings or property; or, to offset the economic injury of decreased income that started during the time of the storms. Homeowners may qualify for up to $200K to repair or replace primary residences. Homeowners and renters may qualify for up to $40K in personal property (e.g., appliances, furniture, personal vehicle, or other belongings). While SBA loan funds cannot duplicate other available assistance like insurance coverage, Gary encourages those impacted to apply even before they know how much insurance will reimburse because SBA can determine eligibility and loan amount, then if needed, reduce the amount of the loan after clients receive insurance funds. Clients who register with FEMA may need to complete an SBA loan application because, in many cases, the FEMA process will wait until an SBA application is complete. Applicants may complete a loan application online, or in person at one of the Disaster Loan Outreach Centers (one currently at Plaza Mayor (formerly Crossroads Mall)). Gary pointed out that the incident period has been extended to May 5th thru June 22nd and the application deadline is now August 26th. Additionally, at the bottom of page 1 where rates are listed, most applicants will qualify for the lower rate.
Are there minimum loan amounts?
Not really, SBA can lend amounts that insurance does not pay. For instance, insurance deductibles that clients would have to pay out of pocket or additional rebuild costs that exceed insurance coverage can qualify for SBA loan funds.
Do SBA applicants all have to apply for FEMA?
It is very strongly recommended. By registering with FEMA if SBA cannot approve the loan the applicant will be sent back to FEMA for additional consideration and referral to other needs assistance.
If a loan recipient receives an SBA loan, then decides they cannot afford it, can they call SBA back to lower the monthly payment so it is more affordable?
Yes, in some cases SBA can extend the term for the loan but the maximum term is 30 years. Also, if a client does not need the full amount of the loan they can notify SBA and we will cap the loan at the amount disbursed. For instance, if you are approved for $100K but only end up using $30K, you can notify SBA and we will cap the loan at $30K. SBA tries not to approve a loan if it looks like it will be too difficult for an applicant to repay. We want people to recover. We do not want to unnecessarily burden those who are recovering from a disaster by giving them a loan they cannot afford.