SBA Disaster loan program is one of the notable loan programs of the Small Business Administration. This type of loan program is intended for people who have faced disasters and need further financial assistance to get back on their feet. If you’re curious about the SBA disaster loan process, it’s better to know first the different kinds of SBA disaster loans and their terms.
Different kinds of SBA Disaster Loans
You might be asking what an SBA Disaster loan can be used for. Well, there are four types of SBA disaster loans. Learn the differences between the types to see which is the best fit for you and your business.
Home and Personal Property SBA Disaster Loans
This type of SBA disaster loan is for people who need funds to repair or replace their primary residence. You can apply for a loan that amounts up to $200,000. If you need funds to repair or replace your personal property, you can apply for funds for a maximum of $40,000.
Business Physical SBA Disaster Loans
If you’re a business owner whose business property was damaged in a declared disaster, this one is for you. With this SBA Disaster loan program, you can repair or replace the following types of business properties:
- Leasehold improvements
Through this SBA Disaster Loan program, you can apply for loans of up to $2 million.
Economic Injury SBA Disaster Loans
A declared disaster might not have damaged your business property, but it still slows down your business. If this is where you stand, you may be able to obtain Economic Injury SBA Disaster Loans. To be eligible for this type of SBA disaster loan, you’ll have to be either of the following:
- A small business
- A small business agricultural cooperative
- A private non-profit organization.
Whether you can’t pay rent because your client had to evacuate or can’t make payroll, you can use this fund to fill the gaps in your working capital.
Military Reservists Economic Injury SBA Disaster Loans
If one of your employees is a military reservist, you might be eligible for this type of SBA disaster loan if he or she is called for active duty. You can loan up to $2 million through Military Reservists Economic Injury SBA Disaster Loans if you can’t fill the gaps of capital when your active reserve employee leaves. Note that this type of program is only for those businesses who don’t have access to credit elsewhere or any typical commercial funding.
Are You Eligible for an SBA Disaster Loans?
Before you dive head first into the process of getting an SBA Disaster Loan, know if you’re eligible for any of them. Check if you’re recovering from a declared disaster. You can refer to the SBA’s declared disaster index. If you can’t see the disaster you’re looking for in the list, note that it might be declared in due time. Although waiting is an option, it’s advisable for you to search for alternative sources of funds.