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SBA Disaster Loans - Not Just For Business

Release date: 
March 12, 2007
Release Number: 

CORDELE, Ga. -- Don't let the word "business" in the name U.S. Small Business Administration (SBA) fool you. The SBA, the U.S. Department of Homeland Security's Federal Emergency Management Agency (FEMA) and the Georgia Emergency Management Agency (GEMA) want to emphasize to those affected by the recent severe storms and tornadoes on March 1-2 that the SBA Disaster Loan Program is an important part of the recovery effort. Following a major disaster, the SBA is the primary source of federal funds for long-term recovery assistance for homeowners and renters.

When the president declares a disaster, victims in the affected areas should register with FEMA. This important first step will open the door to a variety of federal disaster relief programs designed to aid in the recovery process. Once a person has registered, by phone, via the Internet or in person, either he or she should both complete and return the SBA disaster loan application packet.

For disaster damage, to property owned by individuals, families and businesses of all sizes, that is not fully covered by insurance the basic form of federal assistance is a low-interest loan from the SBA. SBA disaster loans up to $200,000 are available to homeowners to repair or replace damaged or destroyed real estate. Homeowners and renters are eligible for up to $40,000 to repair or replace damaged or destroyed personal property.

If the loan application is approved, you may be eligible for additional funds to cover the cost of improvements that will protect from future property damage. The amount of the additional funds may not exceed 20 percent of the approved loan amount.

The SBA is authorized by the Small Business Act to make two types of direct loans to businesses:

  • Any business that is located in a declared disaster area and has incurred damage during the disaster may apply for a loan to help repair or replace damaged property to its pre-disaster condition. The SBA makes physical disaster loans of up to $1.5 million to qualified businesses. Physical disaster loans are for permanent rebuilding and replacement of uninsured or underinsured disaster- damaged privately owned real and/or personal property. SBA's physical disaster loans are available to businesses of all sizes and nonprofit organizations.

  • Economic injury disaster loans provide necessary working capital until normal operations resume after a disaster.  Those loans are used to help pay their fixed debts, payroll, accounts payable, and other bills that can't be paid because of the disaster.

Residents who have insurance are urged to register with FEMA and complete the SBA application. Registration protects the right to seek state-FEMA disaster assistance which may help pay for damage either not covered or not completely covered by insurance.

Information in the loan application allows FEMA and SBA to determine the type of assistance an applicant may receive. Although the form must be completed for some types of assistance, loan applicants are not required to take out an approved SBA loan, but recovery officials emphasize that homeowners and renters may short-circuit or even halt the assistance process by postponing or ignoring this key information-gathering step.

Help with applications or any other information about state-FEMA recovery programs is available at any Disaster Recovery Center . Disaster victims are urged to register for assistance first by calling 1-800-621-FEMA (3362) or TTY 1-800-462-7585 for the hearing- or speech-impaired. Also, victims can register online at

FEMA manages federal response and recovery efforts following any national incident, initiates mitigation activities and manages the National Flood Insurance Program. FEMA works closely with state and local e...

Last Updated: 
July 16, 2012 - 18:46
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