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SBA disaster loans are low-interest, long-term loans provided by the Small Business Administration for individuals or businesses affected by a disaster. There are four types of loans available, including loans for personal property, business repairs, economic damage, and military reservist deployment. Loans can be used for repairs, upgrades, or economic losses. Applicants can borrow varying amounts, and interest rates typically range from 4-8% over a 30-year period. The SBA welcomes applications from businesses or nonprofits of all sizes.
SBA disaster loans are low-interest, long-term loans made to individuals or businesses by the United States Small Business Administration (SBA) in areas where a disaster has been declared. These loans could be used for a variety of purposes, such as repairing damage or offsetting economic losses caused by a disaster. There are four main types of disaster relief loans: loans to repair homes and other personal property, repair loans for businesses, loans to cover economic damage, and loans to cover economic damage caused by the deployment of a military reservist. Applicants for SBA disaster relief loans can apply to borrow varying amounts, depending on the specific type of loan. Typically, interest rates for disaster relief loans are 4-8% over a 30-year period.
These loans for damage to personal property or housing can be given to tenants or homeowners even if they are not business owners. Some of these loans are for replacing furniture, clothing, appliances, or other household items that were damaged or destroyed in a disaster. Other times, these loans are made to repair affected homes or to make upgrades that would help prevent destruction in a future disaster. SBA disaster loans for homes and personal property usually cannot be used for rental properties, which may be covered by a business disaster loan.
Business disaster loans are provided to business owners or non-profit organizations to repair or replace destroyed buildings, machinery, inventory or other assets related to the business or organization. A portion of the money from an SBA disaster relief loan could also be used to upgrade a property to protect it from damage from similar disasters in the future. Also, business disaster loans can be used to cover repairs to uninsured or underinsured properties. The SBA welcomes applications from businesses or nonprofits of all sizes, not just small businesses.
Other types of SBA disaster relief loans can cover economic losses caused by a disaster. These loans might only be available to small businesses or farms, but non-profit organizations of any size might also apply. At the end of the application process, an inspector will visit the applicant to assess the damage and determine the specifics of the loan.
A final type of SBA disaster loan covers the economic losses a business could incur when a military reservist who is an essential employee is employed, causing business disruption. These loans could only be made to small businesses that, according to the SBA, are unable to finance their recovery without financial assistance from the federal government.
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