Discarding Your SBA Loan Packet Could Be Like Throwing Away Money

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Release date: 
September 1, 2010
Release Number: 
1931-042

LAREDO, Texas -- Texans who suffered damages or losses from Hurricane Alex and received a loan application from the U.S. Small Business Administration (SBA) are urged to complete and return the application according to disaster officials of Texas Division of Emergency Management (TDEM) and the Federal Emergency Management Agency (FEMA). Doing so will ensure the applicants are considered for the full range of disaster assistance that may be available to them.  There is no cost to apply.

"Housing assistance and emergency home repair grants are approved as soon as possible to get flood survivors into safe, sanitary and secure housing," said State Coordinating Officer Ben Patterson. Patterson noted that low-interest SBA loans are the largest source of disaster funds for making substantial repairs or rebuilding damaged structures.

"For that reason alone, you can see why we need to receive and process these applications as quickly as possible," said Patterson.

Patterson said that longer-term assistance keyed to information derived from SBA loan applications include: eligibility for the Individuals and House Programs that help meet serious disaster-related needs and expenses not covered by insurance, as well as funding for mitigation measures designed to reduce the risk of damage caused by future disasters.

Brad Harris, the federal official coordinating the disaster recovery effort, said that the assistance process depended on individuals or households providing needed information. "But, if an applicant is referred to the SBA, we need to complete that part of the process before we can look at other options," Harris said.

Harris explained that filling out an SBA application does not guarantee that an applicant will be approved for a loan, nor does it mean that they must accept the loan. However, if the SBA form is not returned, applicants might qualify for only a limited number of disaster recovery assistance programs.

SBA serves as the federal government's primary source of money for the long-term rebuilding of disaster-damaged private property. SBA helps homeowners, renters, businesses of all sizes, and private non-profit organizations fund repair or rebuilding efforts, and cover the cost of replacing lost or disaster-damaged personal property.

Homeowners may borrow up to $200,000 for the repair or replacement of their primary residence not fully compensated by insurance. Homeowners and renters may also borrow up to $40,000 for replacement of personal property including vehicles.

Businesses and nonprofits may apply to borrow up to $2 million for the following:

  • Loans to repair damage to real estate, machinery, equipment, inventory and supplies.
  • Economic injury loans (for small businesses and most private non-profits) to help provide working capital to recover from the disaster's economic impact.
    Collateral is not required for physical loss loans of $14,000 or less or for economic injury loans of $5,000 or less.

Homeowners and renters who apply for an SBA loan and who are declined for repayment ability may be referred to FEMA's Other Needs Assistance (ONA) grant program. Homeowners and renters must return the SBA application, if they receive one, to be considered for ONA. ONA provides reimbursements for personal property losses, vehicle repair or replacement, moving and storage fees, and other serious disaster-related expenses not covered by insurance or other sources. Besides ONA, FEMA may also provide grants to help pay for temporary housing and home repairs.

Other SBA loan application facts:

  • The application should be completed even if an individual does not want or believe he or she qualifies for a loan. Determination for additional assistance cannot be made until the application is submitted; registrants should complete applications ...
Last Updated: 
July 16, 2012 - 18:46
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