This article contains information on disaster relief loans, including what they are, what they cover, who is eligible to recieve them, and more. This article was written by Texas RioGrande Legal Aid.
Can you get a federal disaster loan?
Following a disaster declared by the president, FEMA partners with the U.S. Small Business Administration (SBA) to help disaster survivors. The SBA offers low-interest disaster loans to homeowners, renters and businesses of all sizes. These are federal long-term disaster recovery loans designed to help you repair physical damage caused by a disaster that is not fully covered by private insurance or other disaster funds.
What is covered?
The SBA’s programs do not duplicate FEMA or other disaster recovery programs. An SBA loan application may trigger other grant assistance through FEMA’s Other Needs Assistance (ONA) program, administered by the State of Texas. If you don’t apply to the SBA, you may lose out on additional help such as:
- reimbursement for lost personal property,
- vehicle repair or replacement, and
- moving and storage expenses.
Who is eligible?
Eligible entities include:
- businesses of all sizes,
- individual homeowners and renters,
- private nonprofit organizations, and
- small agricultural cooperatives.
Can I get a loan to pay my business operating expenses?
Economic Injury Disaster Loans (EIDL loans) are available from the SBA for businesses that have “substantial economic injury," meaning the business is unable to meet its obligations and to pay its ordinary and necessary operating expenses. EIDLs provide working capital to help small businesses survive until normal operations resume after a disaster. A business may qualify for both an EIDL and a physical disaster loan.
How do I apply?
How much can I borrow?
- Eligible homeowners: up to $200,000 for home repair or replacement of primary residences.
- Eligible homeowners and renters: up to $40,000 to replace disaster-damaged or destroyed personal property.
- All businesses regardless of size: up to $2 million to cover physical damages.
- Small businesses and most private nonprofits: up to $2 million for any combination of property damage or economic injury under SBA’s Economic Injury Disaster Loan (EIDL) program.
SBA loans offer terms up to 30 years. Interest rates are as low as:
- 1.688% for homeowners and renters,
- 4% for businesses, and
- 2.625% for private nonprofit organizations.
Deadlines vary depending on the type of loan. Apply immediately. Do not wait to hear back on claims submitted to your insurance company.
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