The Aftermath: SBA’s Loan Offerings After a Disaster

flooded city

Multiple elements can lead to the downfall of any business. While you might have control over most of these elements and mitigate them, you have little control over a natural disaster. Unfortunately, we cannot control hurricanes, tornadoes, and floods and when they happen. After a disaster, it is difficult to get back on your feet without the right financial backing.

If your business is recovering from a disaster which meets the SBA’s declared disaster index, you can receive help. This is in the form of an SBA loan advanced through many Ogden-based credit unions offering it as an SBA disaster loan. It is a low-interest loan designed for homes and businesses affected by a declared natural disaster. The following are the categories of SBA disaster loans you can apply for.

SBA Business Physical Disaster Loan (BPDL)

BPDLs are long-term secured loans meant for business owners for the replacement of lost or damaged property after a disaster. The loans can be used to repair or replace inventory, machinery and business premises. Unlike other SBA loan programs, BPDLs are open to both non-profit and for-profit organizations of all sizes. The loan amounts are a maximum of $2 million with interest rates of 4-8% over a 30-year loan term.

SBA Economic Injury Disaster Loan (EIDL)

This is essentially a working capital loan open to non-profit, for-profits and small agricultural co-ops which have suffered a revenue loss owing to a natural disaster in their locality. EIDLs are designed to help the business stay operational while the area hit by the disaster continues its recovery operations. The loan amount depends on your business needs but can be up to $2 million. EIDL interest rates are a maximum of 4%, and the loan is repaid within 30 years.

SBA Military Reservist Economic Injury Disaster Loan (MREIDL)

These are 30-year loans intended for companies which suffer a loss after one or several of their employees have been called for active military duty.  A company should meet specific insurance requirements  to qualify for the loan. It should, for instance, have flood or interruption insurance if it is located within a flood-prone area. The MREIDL cannot be used for recouping profits or losses or refinancing your current debts. The typical loan amount is $2 million though large organizations can qualify for more. MREIDL’s interest rate is 4%.

SBA Personal Property and Home Disaster Loan

Senior businessman showing a documentThis is meant for those who are renting or own a primary residence destroyed by a natural disaster. The loans are primarily intended for the repair of your home though upgrades to the property can be allowed provided they are meant to prevent future property damage. The SBA personal property and home disaster loan can also be used for the replacement of lost or irreparably damaged home appliances, furniture, clothes, and cars. The loan amount is$200,000 for repairs and $40,000 for personal property replacement with rates of 4-8%.

A home or business insurance can also help you get back on your feet after a natural disaster. But if you have a small business, you can apply for these loans as financial relief. Most loans are processed within two to four weeks, and an initial disbursement sent within five days of the loan’s approval.

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