IBTS Fact Sheet: SBA Disaster Loans

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What are SBA disaster loans?

What are SBA disaster loans?

The Small Business Association (SBA) offers low-interest loans to homeowners and renters for repairing homes, rebuilding homes or replacing personal property following a natural disaster.

These loans provide assistance to individuals whose needs are not fully met by insurance, FEMA’s Individual Assistance Program or other compensation. Unlike other types of disaster assistance, these are loans that must be paid back in full.

How much can I borrow?

  • Homeowners may borrow up to $200,000 to repair or replace their primary residence.
  • Homeowners and renters may borrow up to $40,000 to replace personal property.
  • Businesses may borrow up to $2 million to replace real estate, inventories, machinery, equipment and all other physical losses.

Why do I need to apply?

FEMA often requires applicants to apply for an SBA loan as part of the federal assistance process. Applying makes you eligible for additional types of federal assistance, like FEMA’s Other Needs Assistance program which covers losses to personal property such as cars, and other costs caused by a disaster like childcare and medical expenses.

You should apply with the SBA as soon as possible, even if you do not intend to accept the loan – there is no obligation to accept an SBA loan. Only the loan amount you accept will be counted against the amount of assistance you’re eligible to receive from other federal sources.

Can I still receive an SBA disaster loan and other types of federal disaster funding later?

SBA loans provide assistance in the short term, but can also affect your eligibility for federal funding issued later on through the Department of Housing and Urban Development’s Community Development Block Grant Disaster Recovery (CDBG-DR) program. CDBG-DR grants primarily benefit low-income residents and do not have to be repaid, provided the recipient follows program requirements.

However, details of the CDBG-DR program funding may not be available for weeks or months following a disaster. In some cases, homeowners may have to decide whether to use an SBA loan before knowing if they qualify for CDBG-DR funds.

Before committing to an SBA loan, be sure that you consider your financial situation, your ability to pay back the loan, and whether you may qualify for CDBG-DR funding later.

How do I apply?

To apply for an SBA loan, you must first register with FEMA.

After registering with FEMA, you can apply for an SBA disaster loan by phone, online, or by visiting your local disaster recovery center:

  • To apply by phone: Call SBA at 800-659-2955. Individuals who are deaf or hard of hearing may call 800-877-8339.
  • To apply online: Use the Electronic Loan Application via SBA’s secure website.

SBA’s website provides more information on the application process for residents and businesses impacted by Hurricane Florence and Hurricane Michael.

What are the application deadlines?

SBA encourages homeowners and renters to apply for a loan as soon as possible, even if you’re not sure you’ll need one.

  • For physical damage, the application deadline is 60 days from the disaster declaration date.
    • If any extensions are added, they will be announced on the SBA website.
  • Applications received after the filing deadline period may be accepted if SBA determines that the late filing resulted from substantial causes beyond the applicant’s control.