SBA announces low-interest disaster loans available
The U.S. Small Business Administration (SBA) announced today that low-interest disaster loans are now available to California residents and businesses. This in response to President Bush's Federal disaster declaration of the 7 county region effected by the wildfires.
The declaration, which includes San Bernardino and Riverside Counties, also covers Los the counties of Los Angeles, Orange, Riverside, San Diego, Santa Barbara and Ventura.
The loans are up to $200,000 are available to homeowners to repair or replace damaged or destroyed real estate. Homeowners and renters are eligible for up to $40,000 to repair or replace damaged or destroyed personal property.
Loans are taken out of the Federal Treasury by the SBA and repaid back into the Federal Treasury and all the loans deal with the concept of uncompensated loss. For example, if a $600,000 home was destroyed and the homeowner's insurance company paid $550,000 of it, SBA would come in to cover the $50,000 shortfall, that the insurance could not cover. Loans are flexible; if costs are higher than orginally estimated, then SBA can increase the amount of the loan.
Businesses of any size and private non-profit organizations may borrow up to $1.5 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory, and other business assets. SBA can also assist funding to homeowners and businesses to help with the cost of making improvements that protect, prevent or minimize the same type of disaster damage in the future. For small businesses, SBA offers Economic Injury Disaster Loans (EIDLs) to help meet working capital needs caused by the wildfires.
Interest rates can be as low as 2.937 percent for homeowners and renters and 4 percent for businesses with terms up to 30 years. Loan amounts and terms are set by SBA and are bases upon each applicant's financial decision.
People effected by the fires who want to be considered for all forms of disaster assistance, must first call and register with the Federal Emergency Management Agency (FEMA) at 1-800-621-3362. FEMA will then refer people to SBA and SBA will send them an application. If people happen to be staying in a disaster recovery area such as shelter, SBA staff on site, can help applicants fillout the required forms on the spot. Additional details on the location of assistance centers can be obtained by calling the SBA Customer Service Center at 1-800-659-2955. People can also log onto the SBA website to find information at www.sba.gov/service/disasterassistance. The filing deadline to return applications for property damage is December 24, 2007. The EIDL deadline for small businesses is July 24, 2008.
Michael Munoz