SBA offers loans to help businesses recover from floods
In response to severe storms and flooding in North Texas in late August, the Small Business Administration (SBA) is offering low-interest Federal Disaster Loans to those affected. .
The SBA acted under its own authority to declare a disaster in response to a request the agency received from Governor Greg Abbott on September 13. As a result, assistance is now available in Tarrant County, as well as Collin, Dallas, Denton, Ellis, Kaufman and Rockwall counties.
“The SBA’s mission-focused team stands ready to help small businesses and Texas residents affected by severe storms and flooding,” said SBA Administrator Isabella Casillas Guzman. “We are committed to providing federal disaster loans quickly and efficiently, with a client-centric approach to help businesses and communities recover and rebuild.”
Starting Monday, Sept. 19, SBA customer service representatives will be on hand at the Dallas (6200 E. Grand Ave.) and Balch Springs (4732 Shepherd Lane.) Disaster Loan Centers to answer questions. about the SBA Disaster Loan Program, explain the application process and help individuals complete loan applications. The centers are open from 9 a.m. to 6 p.m. and without appointment.
Ahmad Goree, senior economic development specialist/public information officer for the SBA’s DFW district, explained that businesses of all sizes and private nonprofit organizations can borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets. The SBA can also lend additional funds to businesses and homeowners to help cover the cost of improvements to protect, prevent, or minimize the same type of disaster damage in the future.
For small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations of any size, SBA offers Economic Disaster Loans (EIDLs) to help meet the needs in working capital caused by the disaster. Economic injury assistance is available whether or not the business has suffered property damage.
Interest rates can be as low as 3.04% for businesses, 1.875% for private nonprofits, and 2.188% for homeowners and tenants with terms up to 30 years. Loan amounts and terms are set by the SBA and are based on each applicant’s financial situation.
Gorée explained the credit terms:
- Credit history – applicants must have a credit history acceptable to the SBA.
- Repayment – applicants must demonstrate their ability to repay all loans.
- Collateral is required for physical loss loans over $25,000 and all EIDL loans over $25,000.
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“The SBA takes real estate as collateral when it’s available. The SBA will not deny a loan for lack of collateral, but will require you to pledge what is available,” Goree said.
Regarding interest rates, Goree said, “By law, interest rates depend on whether or not each applicant has credit available elsewhere. An applicant does not have credit available elsewhere when the SBA determines that the applicant does not have sufficient funds or other resources, or the ability to borrow from non-governmental sources, to provide its own disaster recovery. An applicant who the SBA determines has the ability to self-recover is deemed to have available credit elsewhere. Interest rates are fixed for the term of the loan.
The applicable interest rates for this catastrophe are as follows:
- Home loans – no credit available elsewhere, 2.188%; credit available elsewhere, 4.375%.
- Business loans – no credit available elsewhere, 3.040%; credit available elsewhere, 6.080%.
- Non-profit organizations – no credit available elsewhere, 1.875%; credit available elsewhere, 1.875%.
- Economic Injury Loans – for businesses and small farms, no credit available elsewhere, 3.040%; credit available elsewhere, not available. For non-profit organizations, no credit available elsewhere, 1.875%; credit available elsewhere, not available.
The law authorizes loan terms up to a maximum of 30 years. However, the law limits companies with credit available elsewhere to a maximum term of seven years, Goree noted, adding that the SBA sets the amount of the installment payment and the corresponding maturity based on the repayment capacity of each. borrower.
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Goree said the loan amount limits are $2 million for businesses and EIDL, subject to certain qualifications and requirements. However, if a business is a major source of employment, the SBA has the authority to waive the $2 million statutory limit. SBA regulations limit home loans to $200,000 for repairing or replacing real property and $40,000 for repairing or replacing personal property.
Applicants may also call the SBA Customer Service Center at (800) 659-2955 or email firstname.lastname@example.org for more information. For people who are deaf, hard of hearing or have a speech impediment, dial 7-1-1 to access telecommunications relay services.