From the hurricanes that hit Texas, Florida and Puerto Rico, to the wildfires and mudslides that devastated parts of California, the past year has been fraught with catastrophic natural disasters which have uprooted countless Americans from their stable lives. All victims of declared natural disasters—businesses, private nonprofits, homeowners and renters—are able to apply for low-interest disaster loans from the U.S. Small Business Administration (SBA) to help them recover. Renters and homeowners do not have to own a business to apply.
These recent disasters, also including tornadoes, hail storms, droughts, cyclones and floods, destroyed properties, businesses, communities, cities and United States territories; left families and their pets without shelter, food, utilities and vulnerable to disease; and caused hundreds of deaths and casualties. Some areas, especially Puerto Rico after Hurricane Maria, are still recovering from the damages.
SBA Disaster Loans
According to the Federal Emergency Management Agency (FEMA), 75 percent of small businesses do not have a disaster plan. Furthermore, 40 percent of small businesses displaced by a natural disaster do not reopen because of exorbitant costs.
Two out of 3 homes in the United States are underinsured by 22 percent, reports Value Penguin. Among renters, three out of 5 are not insured for their belongings.Of those homes that experienced flood damage from Hurricane Harvey, only 20 percent had flood insurance.
The SBA offers low-interest disaster loans for businesses, private nonprofits, homeowners and renters who need assistance with uninsured costs. Even those insured for natural disaster damage are encouraged to apply for a SBA Disaster Loan The SBA can lend you the amount of your total loss, even if you are unsure about how much your insurance will cover.
During Fiscal Year 2017, the SBA approved a total of 27,263 disaster loans for a total of $1.7 billion— $1.3 billion for home disaster loans and $296 million for business disaster loans. The SBA processed 84,705 home loan applications and 10,882 business disaster loan applications, making a total of 95,587 processed loan applications.
Resources for Renters and Homeowners
Renters and homeowners are eligible to apply for the SBA’s no cost, low-interest rate disaster loans even if they do not own a business. According to the SBA website, renters and homeowners may borrow up to $40,000 to repair or replace clothing, furniture, cars or appliances.
Homeowners may borrow up to $200,000 to repair or replace their primary residence to pre-disaster condition. Moreover, loans may be increased up to 20 percent of total amount of physical loss to make improvements that lessen the risk of future property damage.
Renters and homeowners can apply for both FEMA assistance and SBA disaster loans simultaneously with zero cost, so do not wait until you get a response from FEMA. You do not have to accept an SBA low-interest rate loan even if you are qualified.
Resources for Small Businesses
Small business owners have additional resources at their disposal during the recovery process. If you have a loan from the SBA, you may be eligible for deferred loan payments. For instance, if your loan postdates August 25, 2017 and you are located in a federal disaster area, your principal and interest payments will be deferred for 12 months. If your business is located near a disaster area, you may be eligible for a 9-month payment deferral.
Small business owners can apply for federal assistance—in the form of cash grants— through the FEMA, online or by calling 1-800-621-FEMA. Local Small Business Development Centers (SBDCs) are available to help small businesses complete forms for disaster relief, recover records and relaunch their businesses.
Businesses can be proactive in protecting themselves against damages from potential natural disasters by being insured for Business Interruption. Many commercial insurance policies provide coverage via endorsement for business income loss due to a direct loss, damage or destruction to the insured property by a natural disaster.
Whether you are a renter, homeowner, business, or nonprofit, know that there is always support available to you in times of need. NAWRB is dedicated to help those affected by these recent natural disasters find resources that can help them rebuild their homes, restart their businesses and regain a sense of stability in their lives.