Indianapolis, IN -- Some individuals and families may be confused when they apply for disaster assistance and then receive a loan application from the U.S. Small Business Administration (SBA). The first thought that runs through their minds is "I'm not a business." But, don't let the SBA name fool you. In a disaster, SBA low-interest loans are the primary source of financial assistance for homeowners and renters as well as business owners.
SBA has issued more than 100 loan application packets to flood victims, but only six had been returned at close of business yesterday. If you receive an SBA packet, you should complete and return it as soon as possible. SBA officials point out that completing their application does not obligate you to take a disaster loan, but if the application package is not returned, it may delay other forms of disaster assistance. Help with completing the application materials is available at any Disaster Recovery Center or by calling the SBA Hotline at 800 359-2227.
Renters may be eligible for up to $ 40,000 for personal property losses, while homeowners may receive $200,000 for repairs or rebuilding their home and $ 40,000 for personal property. Low-interest disaster loans are currently 3.375 percent.
If, for any reason, applicants are found to be ineligible for a low-interest loan, they will automatically be referred to the Individual and Family Grant (IFG) Program. This program provides grants to meet serious disaster-related needs and necessary expenses not covered by insurance or available through other federal, state or voluntary agency disaster assistance programs.
The IFG program is administered by the state, with the Federal Emergency Management Agency (FEMA) providing 75 percent of the funds and the state providing 25 percent.
Business owners are only eligible for loans, up to $1.5 million. These are designed to repair or replace destroyed or damaged business facilities, inventory, machinery, equipment, etc., not covered by insurance. Businesses of any size are eligible. Non-profit organizations such as charities, churches, private universities, etc are also eligible. Loans also may be available to small businesses for working capital to carry them through the recovery period.