After the president declares a disaster, FEMA partners with the U.S. Small Business Administration (SBA) to offer low-interest loans to disaster survivors. These are long-term federal loans to help cover costs that private insurance and other disaster funds do not fully cover.
You can apply for an SBA disaster loan by going through FEMA’s disaster assistance application process. It is important to apply immediately, as there are time limits. Do not wait for your insurance claim to come back. You do not have to be a business to apply.
Who is eligible for an SBA disaster loan?
Businesses of all sizes, landlords, individual homeowners and renters, nonprofits, agricultural cooperatives, and homeowner/condo associations are all welcome to apply. Even though these loans are administered by the SBA, you do not have to be a business in order to apply.
What does a disaster loan cover?
SBA disaster loans cover physical property damage that insurance, FEMA, and other programs do not cover. Businesses may also be able to get help with operating expenses through an SBA Economic Injury Disaster Loan.
Other Needs Assistance: When you ask for an SBA disaster loan as part of your FEMA application, the SBA will forward your information to the Other Needs Assistance program. FEMA and the Texas Health and Human Services Commission work together to administer this program. Other Needs Assistance helps with:
- Replacing personal property, including furniture and appliances
- Vehicle repair or replacement
- Moving and storage costs
- Childcare costs
- Medical and dental costs
- Funeral costs
You must apply for FEMA and SBA disaster help to access most Other Needs Assistance. They will refer you to the Other Needs Assistance program.
Can I get a loan to pay my business operating expenses?
The SBA provides Economic Injury Disaster Loans to businesses that cannot meet obligations or pay for operating expenses due to disaster. Economic Injury Disaster Loans help small businesses survive until normal operations resume.
A business may qualify for both an Economic Injury Disaster Loan and a physical disaster loan.
How much can I borrow?
The amount one can borrow depends on who is applying and what they are applying for. Some general amounts are:
- Home repair or replacement: $25,000 to $200,000
- Homeowners and renters to replace personal property: up to $40,000
- Businesses repairing physical damages: up to $2,000,000
- Small businesses and nonprofits for property damage or economic injury (Economic Injury Disaster Loan): up to $2,000,000
You may also be able to borrow an additional 20% of your physical damage amount to pay for improvements that will help prevent similar damage in the future. For example, fire or wind-resistant construction.
What are the SBA loan interest rates?
The SBA typically offers loan terms of up to 30 years. Interest rates vary depending on credit.
Rates may be as low as:
- Homeowners and renters: 1.438%
- Businesses: 2.83%
- Nonprofits: 1.875%
Rates are capped at:
- 8% if you have the option to borrow elsewhere
- 4% if you do not have the option to borrow elsewhere
- 4% for Economic Injury Disaster Loans
What fees do I have to pay on an SBA disaster loan?
SBA disaster loans have no fees.
How do I apply?
Register by phone through FEMA, (800) 621-FEMA (3362), (800) 462-7585), or online through www.DisasterAssistance.gov.
If you are eligible for an SBA loan, the SBA will contact you by an automated callback to complete the SBA application. You can also apply at your local Disaster Recovery Center.
Be aware that if you apply online, all your communications with the program will be online. They will not send you paper communications, so check your online account regularly.
Deadlines vary depending on the type of loan. Apply immediately. Do not wait to hear back on claims submitted to your insurance company.
Some future deadlines include:
- July 21, 2023 - Property damage loans for the May 13, 2023, tornado and severe weather incident: Hidalgo, Cameron, and Willacy Counties.
- February 22, 2024 - Economic Injury Disaster Loans for the May 13, 2023, tornado and severe weather incident: Hidalgo, Cameron, and Willacy Counties.
- December 18, 2023 - Economic Injury Disaster Loans for the January 24, 2023, tornado and severe weather incident: Brazoria, Chambers, Fort Bend, Galveston, Hardin, Harris, Jasper, Jefferson, Liberty, Montgomery, Newton, Orange, and Waller Counties.
(This is not a complete list of recognized disasters. FEMA funds, SBA loans, or other assistance may be available in your area even if not listed here.)
Need help or tips for managing your loan?
Texas RioGrande Legal Aid prepared a guide on Managing an SBA Disaster Loan. It includes information about loan terms, recommended recordkeeping, and common loan requirements.
This article explains your rights as a tenant after a disaster.
This article explains the help available for small businesses after a disaster.
Here are things you need to know to apply for FEMA aid.