What used to be a family home is now splintered debris after being beat by strong winds. An office building or retail store that serves as a source of sales and income for several workers is now unusable and unprofitable in the blink of an eye. Who do you call?
Helping communities recover and rebuild after hurricanes, floods, tornadoes and other disasters is a side of the U.S. Small Business Administration few people know about. It has been part of SBA’s mission since 1953, when Congress passed the Small Business Act, the law that created the agency.
In the Lower Rio Grande Valley District, which covers 14 Texas counties, 226 homeowners and businesses were approved for more than $6 million in disaster loans last fiscal year.
These long-term, low-interest loans are available to homeowners, renters, businesses of all sizes and nonprofits. This includes churches following a declared disaster, to help not only repair damage but replace personal property.
I have lived in the Valley for 32 years, but it was not until 2008 when Hurricane Dolly devastated the coast that I became aware of this side of SBA. I remember SBA teams coming to town to assess the damage and talk to city leaders and residents. It meant so much to many folks in the area.
Today, as the Lower Rio Grande Valley district director, I not only have the privilege of directing the delivery of SBA loan programs and services, but equally important, I have the responsibility to ensure the disaster loan services are touching the families and neighborhoods that need it most after a declared disaster, especially since hurricane season began June 1.
These direct loans are the only form of SBA assistance not limited to small businesses. The majority of these loans — about 80 percent — go to homeowners and renters.
Here is a short list of what is available from the SBA:
- $200,000 available to homeowners to repair or replace damaged or destroyed real estate.
- $40,000 available to homeowners and renters to repair or replace personal property like furniture, clothing, appliances, cars, etc.
- $2 million available for businesses of all sizes and non-profit organizations such as charities, churches and private universities to cover the cost of repairing or replacing damaged property — which includes inventory, supplies, machinery and the building — owned by the company.
- 20 percent – SBA can also lend additional funds — up to 20 percent of the verified physical damage — to help with the cost of making improvements to the property that protect, prevent or minimize the same type of disaster damage from occurring in the future. Improvements for mitigation measures include a safe room or storm shelter.
- Economic Injury Disaster Loans are loans for working capital to small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations to help them cover normal operating expenses through the disaster recovery period. EIDL assistance is available only to applicants determined by SBA to have no credit available elsewhere. The EIDL is available even if the business didn’t suffer physical damage.
For all of these loans, the amounts and terms are set by the SBA based on each applicant’s financial condition. Terms of up to 30 years are available on all disaster loans.
For more information and a list of current disaster declarations, visit www.SBA.gov/disaster. Also, the SBA Disaster Assistance Customer Service Center is staffed to take calls from 8 a.m. to 8 p.m. EST, Monday through Friday.