SBA disaster loan approval can take anywhere from a few days to a few weeks. The process is generally quicker for those who have all their paperwork in order and can provide the required documentation.
Checkout this video:
The Small Business Administration (SBA) offers disaster loans to help businesses and homeowners recover from declared disasters.
SBA disaster loans can be used to repair or replace real estate, personal property, machinery, equipment, inventory, and business assets that have been damaged or destroyed in a declared disaster. They can also be used to help make up for lost sales and income due to the disaster.
Disaster loans are available in two types: physical damage loans and economic injury disaster loans.
Physical damage loans are available to business owners and homeowners to repair or replace damaged or destroyed real estate and personal property. These loans can also be used to help make up for lost revenue and income due to the disaster.
Economic injury disaster loans are available to business owners and homeowners to help make up for lost revenue and income due to the disaster. These loans can be used to pay fixed debts, payroll, accounts payable, and other bills that cannot be paid because of the disaster.
The SBA offers four different types of disaster loans: home disaster loans, business physical disaster loans, economic injury disaster loans, and non-profit organization physical disaster loans. Homeowners and renters can apply for home disaster Loans to repair or replace their home or personal property that was damaged or destroyed in a declared disaster. Businesses can apply for Business Physical Disaster Loans to repair or replace their business property that was damaged or destroyed in a declared disaster. Economic Injury Disaster Loans are available to business owners and operators who suffer economic injury as a result of a declared disaster but do not have any physical damage to their business. Non-profit organizations can apply for Non-Profit Organization Physical Disaster Loans to repair or replace their facilities that were damaged or destroyed in a declared disaster
What is an SBA Disaster Loan?
The U.S. Small Business Administration (SBA) offers disaster loans to help businesses and homeowners recover from declared disasters. SBA disaster loans can be used to repair or replace real estate, personal property, machinery, equipment, inventory, and business assets that have been damaged or destroyed in a declared disaster.
Disaster loans are available to business of all sizes, including sole proprietorships, independent contractors, and religious organizations. Homeowners and renters are also eligible for disaster loans from the SBA.
How to Qualify for an SBA Disaster Loan
The U.S. Small Business Administration (SBA) is the primary source of federal funding for small businesses and entrepreneurs seeking to recover from a declared disaster. SBA disaster loans can be used to cover the costs of repairing or replacing real estate, personal property, machinery, equipment, inventory, and business assets that have been damaged or destroyed in a declared disaster.
To be eligible for an SBA disaster loan, your small business must first meet the SBA’s size standards. For most businesses, this will mean that your business must have fewer than 500 employees. Additionally, your business must be unable to obtain credit elsewhere in order to be approved for an SBA disaster loan.
Once you have determined that your small business meets the SBA’s size standards and is unable to obtain credit elsewhere, you will need to begin the process of completing and submitting an SBA Disaster Loan Application. The SBA Disaster Loan Application can be found on the SBA’s website and must be completed in full in order to be considered for an SBA disaster loan.
Once your completed SBA Disaster Loan Application has been submitted, it will take approximately two weeks for the SBA to review your application and make a decision on whether or not you will receive an SBA disaster loan. If you are approved for an SBA disaster loan, you will then need to work with the SBA to determine the terms of your loan agreement.
Generally speaking, most small businesses that are approved for an SBA disaster loan will receive a long-term, low-interest loan from the SBA. The specific terms of your loan agreement will depend on factors such as the amount of money you are requesting through your loan and the purpose of your loan.
The Application Process
The first step in the process is to complete the SBA disaster loan application. This can be done online, or you can request a paper application by calling the SBA’s Disaster Assistance Customer Service Center at 1-800-659-2955.
Once the application has been submitted, it will be assigned to an SBA Loan Officer who will contact you to discuss your business needs and determine which disaster loan programs you may be eligible for.
After your eligibility has been determined, the SBA will require that you submit certain documentation supporting your loan request. This may include tax returns, financial statements, insurance information, and/or other documentation depending on the type of loan being requested.
Once all required documentation has been received, the SBA will review your loan request and make a determination on whether or not to approve the loan. If approved, you will be notified of the terms and conditions of the loan and will be required to sign and return the loan documents.
The Underwriting Process
After you submit your completed disaster loan application, your loan is assigned to a Loan Officer. The Loan Officer conducts an evaluation of your eligibility and credit worthiness, including a review of your credit report. If the Loan Officer determines that you qualify and are eligible for a disaster loan, they will send you a Loan Authorization Notice.
The approval process differs depending on whether you apply for a Home Disaster Loan or Business Disaster Loan. For Home Disaster Loans, once the loan is conditionally approved, disaster victims have 45 days to accept the terms of the loan and return any requested documentation. For Business Disaster Loans, after the loan is conditionally approved, business owners have up to 10 days to accept the terms of the loan and return any requested documentation.
After you accept the terms of the loan and return any requested documentation, your loan is forwarded to our servicing center where it will be processed and disbursed. It can take 7-10 days for the funds to be available in your account after we have received all required information from you.
The SBA disaster loan approval process can take anywhere from a few days to a few weeks.
The amount of time it takes for your loan to be approved will depend on a number of factors, including:
-How quickly you submit all required documentation
-How complex your business is
-How many disaster loans have been submitted in your area
The SBA strives to approve disaster loans as quickly as possible, but it’s important to be prepared for the possibility that the process could take a few weeks. If you need funding immediately, you may want to consider alternative options such as a business line of credit or an SBA Express Loan.
The U.S. Small Business Administration’s (SBA) disaster loans are the primary source of long-term, low-interest Recovery assistance for businesses and homeowners located in disaster areas declared by the President.
Since its inception in 1953, the SBA has approved more than 3 million disaster loans totaling over $50 billion. SBA disaster loans are available to business concerns, small agricultural cooperatives, small businesses engaged in aquaculture, and most private non-profit organizations of all sizes located in a declared disaster area.
Homeowners and renters are also eligible for up to $200,000 to repair or replace their primary residence or rental property to its pre-disaster condition.
The Interest rate for business physical damage and economic injury disaster loans is 4 percent. The interest rate for home mortgages is as low as 1.965 percent for terms up to 30 years. Loan terms can be up to 30 years.
To be considered for an SBA loan, applicants must first apply with the Federal Emergency Management Agency (FEMA) for an Individual Assistance (IA) grant. Applicants who receive an IA grant may then apply for an SBA loan within 60 days of the major disaster declaration date.
The entire process from FEMA application to final approval for an SBA loan can take several weeks or longer depending on the applicant’s individual circumstances as well as the availability of SBA staff and borrowers to complete the necessary paperwork