Getting an SBA Loan After a Natural Disaster

The SBA has special loan programs to help individuals and businesses after a natural disaster.

Even if you don't have a small business, if you've been affected by a natural disaster—like a hurricane, tornado, wildfire, or mudslide—you might qualify for a loan from the U.S. Small Business Administration (SBA). SBA loans are available for homeowners, renters, and business owners.

Read on to learn more about SBA loans and how to apply for one, as well as what kinds of foreclosure relief are available if you're having trouble keeping up with payments on an existing mortgage after a natural disaster.

About SBA Disaster Loans

SBA provides low-interest, long-term loans if your home, personal property, or business has suffered physical damage, or if your business has suffered economic damage, due to a declared disaster.

Types of Loans

The SBA provides the following types of disaster loans:

  • Home and Personal Property Loans (for homeowners and renters). Homeowners may apply for up to $200,000 to restore their primary residence to its pre-disaster condition. Renters and homeowners may be able to borrow up to $40,000 to repair or replace personal property—like furniture or clothing—that was damaged or destroyed in a disaster. (Read more about Getting a SBA Home or Personal Property Loan After a Natural Disaster.)
  • Business Physical Damage Disaster Loans (for businesses). The SBA also provides loans of up to $2 million to businesses that are physically damaged in a disaster. This kind of loan may be used to repair or replace damaged real property and business equipment that is not covered by insurance. (To learn about Business Physical Disaster Loans, see SBA Disaster Loans for Businesses.)
  • Economic Injury Disaster Loans (for businesses). Businesses may also qualify for a disaster loan from the SBA—up to $2 million—to help pay for ordinary and necessary operating expenses until normal operations resume if the business suffered economic injury as a result of a disaster, even if no physical damage occurred.
  • Military Reservists Economic Injury Disaster Loans (for businesses). Loans up to $2 million are also available for eligible small businesses that can’t meet ordinary and necessary operating expenses because an essential employee was called to active military duty in his or her role as a reservist. These loans are intended to provide the working capital needed by a small business to meet its obligations until operations return to normal once the essential employee is released from active military duty.

How to Apply for a SBA Disaster Loan

To apply, go to the U.S. Small Business Administration website to find out if you are within a declared disaster area. You can also find the deadline to apply for a SBA disaster loan by reviewing your relevant section.

Next, go back to the main page and click on Apply for Assistance” While you can apply via mail or in person at any Disaster Recovery Center, the online application is the quickest way to get a decision about loan eligibility. For more information or to find a Disaster Recovery Center near you, contact the SBA Customer Service Center at 800-659-2955 (TTY: 800-877-8339) or send an e-mail to [email protected].

Avoiding a Foreclosure

Borrowers with any type of loan might qualify for financial relief from FEMA. Also, loan servicers sometimes offer relief options, like forbearances or modifications, to affected homeowners. (To learn about foreclosure relief after a natural disaster, see Help for Homeowners Facing Foreclosure After a Natural Disaster: Foreclosure Moratoriums.)

If you're having trouble making payments on an existing mortgage after a natural disaster—and you have a FHA, Fannie Mae, Freddie Mac, or VA loan—you might be eligible for a foreclosure moratorium. A moratorium is a period of time following a natural disaster during which the loan servicer won't start a foreclosure even if you're behind in payments. If you're facing foreclosure and want to learn about your rights, consider talking to a foreclosure attorney.

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