The SBA’s Disaster Assistance Loan Program is the primary federally funded, disaster assistance loan program for funding longrange recovery for private sector, nonagricultural disaster victims. Assistance is available to businesses of all sizes and to individuals. Eligibility is based on an individual’s financial criteria. Interest rates fluctuate according to statutory formulas. A low interest rate (not to exceed four percent) is available to applicants without credit available elsewhere. A higher rate (not to exceed eight percent) is available for those with credit available elsewhere. The program provides disaster loans when a declaration is made by the President or the SBA Administrator. There are three disaster loan programs:
Physical Disaster Business Loans Loans are available to qualified applicant businesses of any size for uninsured losses up to $1.5 million to repair or replace business property to predisaster conditions. Loans may be used to replace or repair real estate, equipment, fixtures and inventory and leasehold improvements.
Economic Injury Disaster Loans (EIDLs) Loans of up to $1.5 million are available for small businesses that sustain economic injury as a direct result of a disaster. These working capital loans are made to businesses, without credit available elsewhere, to help pay ordinary and necessary operating expenses that would have been payable barring the disaster.
Note: The maximum loan amount is $1.5 million for EIDL and physical disaster business loans combined, unless the business meets the federal criteria for a major source of employment. The $1.5 million limit can be waived for businesses employing 250 or more people in an affected area.
Loans for Homes and Personal Property Real Property: This is the major longterm recovery program for individual disaster losses. Loans are available to qualified homeowners for uninsured losses up to $200,000 to repair or restore a primary residence to predisaster condition.
Personal Property: Loans are available to qualified homeowner and renter applicants for uninsured losses up to $40,000 to repair or replace personal property, such as clothing, furniture, cars and so forth. Loans are not intended to replace extraordinarily expensive or irreplaceable items, such as antiques, pleasure crafts, recreational vehicles or fur coats.
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