SBA Disaster Loans

If you are located in a declared disaster area, you may be eligible for financial assistance from the U. S. Small Business Administration (SBA).

What Types of Disaster Loans are Available?

Business Physical Disaster Loans – Loans to businesses to repair or replace disaster-damaged property owned by the business, including real estate, inventories, supplies, machinery and equipment. Businesses of any size are eligible. Private, non-profit organizations such as charities, churches, private universities, etc., are also eligible.

Economic Injury Disaster Loans (EIDL) – Working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period.

What are the Credit Requirements?

Credit History – Applicants must have a credit history acceptable to SBA.
Repayment – Applicants must show the ability to repay all loans.

What are the Interest Rates?

By law, the interest rates depend on whether each applicant has Credit Available Elsewhere. An applicant does not have Credit Available Elsewhere when SBA determines the applicant does not have sufficient funds or other resources, or the ability to borrow from non-government sources, to provide for its own disaster recovery. An applicant, which SBA determines to have the ability to provide for his or her own recovery is deemed to have Credit Available Elsewhere. Interest rates are fixed for the term of the loan. The interest rates applicable for this disaster are: Physical Damage Loan Types

	No Credit Available Elsewhere	Credit Available Elsewhere
Business Loans	4.000%	8.000%
Non-Profit Organizations	3.250%	3.250%

What are the Loan Terms?

The law authorizes loan terms up to a maximum of 30 years. However, the law restricts businesses with credit available elsewhere to a maximum 7-year term. Borrowers may be required to provide collateral.

SBA Loan Flexibility

One of the most common concerns we hear from our small businesses in western North Carolina is that they already shoulder a burden of debt and may not be able to take on an SBA disaster loan to help recover and stay resilient in the aftermath of Hurricane Helene. Please note the following flexibilities available to existing and potential SBA borrowers.

For SBA Hurricane Helene disaster loans

The borrower gets the first year with no payments due, and interest does not accrue during this period either. (It’s a freebie.)
Should you decide not to take the approved loan, you may cancel the offer without penalty.

For existing SBA loans

COVID EIDL Loans: SBA is offering a Hardship Accommodation Plan (HAP) for COVID EIDL borrowers experiencing short-term financial challenges. Borrowers eligible for this plan may pay 10% of their usual payments for six months, without first catching up on missed payments. Borrowers will have the option to renew after the plan concludes. Interest will continue to accrue, which may increase (or create) a balloon payment due at the end of the loan term. See more at https://lnkd.in/ehw4DQ-y
SBA 7(a) loans: For 7(a) loans that are not sold on the secondary market, lenders may grant payment deferments of up to 6 consecutive months (no SBA notification required). For 7(a) loans that are sold on the secondary market, lenders may grant a one-time unilateral deferment of up to 90 days without requiring prior investor consent. Contact your lender for additional guidance or information regarding deferments, including those beyond the guidelines stated.
SBA 504 loans: Generally, the amount deferred should not exceed six cumulative monthly payments or 20% of the original loan amount, whichever is less. During the deferment period, the Certified Development Company (CDC, the SBA 504 lender) should monitor the borrower’s operations so that at the end of the deferment period, the CDC can determine whether an additional deferment is necessary and prudent.
SBA microloans: The SBA microloan intermediary lender can defer microloan payments for a borrower up to six months. The lender can also modify a microloan to extend the term to a maximum of 7 years. If these options do not work, the lender can consider refinancing a microloan with a new microloan.

Ready to Start?

The SBA currently has 24 locations for in-person assistance in Western NC, almost all of which are open on weekends. Go to the NC District Office LinkedIn page for updated information.