SBA Funds Still Available
Disaster Victims Must Return Applications
Release Date: October 8, 2004
Release Number: 1546-037
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ASHEVILLE, N.C. -- Officials at the U.S. Small Business Administration (SBA) report that only 10 percent of SBA loan applications distributed to those who have registered with the Federal Emergency Management Agency (FEMA) have been returned.
“A call to register with FEMA, at 1-800-621-FEMA (3362) or TTY 1-800-462-7585 for the speech or hearing impaired, is the first step toward receiving federal disaster assistance,” said Justin DeMello, federal coordinating officer for the disaster recovery effort. “But, if you are sent an SBA loan application in response to that call,” adds DeMello, “completion and return of those forms is the only way to move forward in the system.”
SBA loan applications are reviewed and loans awarded based upon the damage or loss incurred and the ability of the applicant to repay a loan. When, and if, a home loan application is not approved, the applicant is referred to FEMA for any grant consideration. Grants may then be made to those eligible for housing repair or replacement or to cover serious unmet, disaster-related needs.
“Individuals and business owners being considered for SBA assistance will find that our loan officers make every effort to provide them with the help they need,” assured SBA Disaster Area Director Michael C. Allen. “While following the letter of the law regarding federal disaster lending, we can be flexible with loan amounts and payment terms that best accommodate their special circumstances,” explained Allen.
The SBA makes disaster loans to homeowners, renters and non-farm businesses of any size. Homeowners may borrow up to $200,000 to repair disaster damaged primary residences. Homeowners and renters are eligible for loans up to $40,000 to replace personal property such as furniture and clothing. Loans up to $1.5 million are available to eligible businesses and non-profit organizations to repair or replace damaged real estate, machinery, equipment and inventory. Also, economic injury disaster loans up to $1.5 million are available to small businesses unable to pay bills or meet operating expenses.
Interest rates on SBA loans can be as low as 3.187 percent for homeowners and renters and 2.9 percent for businesses with terms up to 30 years. Initial loan repayments aren’t due for five months after loan disbursal, but may be deferred for a longer period if the damage to the real estate is deemed substantial. Applicants who are not approved for an SBA loan may have two additional opportunities to resolve problems related to their applications.
“Where other loan programs might not look very appealing, an SBA loan may be more beneficial and easier to pay back than you think,” said Allen. “But you must complete and return the application to receive the assistance.”
For more information, call the SBA Helpline at 1-800-359-2227 or visit the SBA Website at www.sba.gov/disaster.
On March 1, 2003, FEMA became part of the U.S. Department of Homeland Security. FEMA's continuing mission within the new department is to lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident. FEMA also initiates proactive mitigation activities, trains first responders, and manages the National Flood Insurance Program and the U.S. Fire Administration.
Last Modified: Friday, 08-Oct-2004 15:01:08