Disaster assistance is money provided to individuals, families and businesses in an area whose property has been damaged or destroyed following a Presidential declared disaster; and whose losses are not covered by insurance. Loans may be available to businesses that have suffered an economic loss as a result of the disaster. Assistance is available from the Federal Emergency Management Agency (FEMA), the Small Business Administration (SBA), the Farm Services Agency (FSA), and state governments.
The first step for those requiring assistance following a disaster is to contact FEMA and apply for assistance. FEMA assistance includes money for housing and essential expenses, such as food and clothing; and critical personal expenses, such as medication..
Money is available for necessary expenses and serious needs caused by the disaster. This includes:
SBA and USDA provide low interest loans to businesses and individuals to repair or replace real estate, personal property, machinery and equipment, inventory and business assets that have been damaged or destroyed in a declared disaster.
If your small business or private, non-profit organization has suffered substantial economic injury, regardless of physical damage, and is located in adeclared disaster area, you may be eligible for financial assistance from the U.S. Small Business Administration.
A. The loan will provide you with operating funds until your business or private, non-profit organization recovers. To the extent you could have made payments had the disaster not occurred, you may use the loan to make payments on short-term notes, accounts payable and installment payments on long-term notes.
A. You may request an EIDL for the amount of economic injury and operating needs, but not in excess of what your business or private, non-profit organization could have paid had the disaster not occurred. In determining your eligible amount, the SBA will look at :
The amount of your economic injury does not automatically represent the dollar amount of your loan eligibility; the SBA will evaluate the information you provide and determine the reasonableness of your loan request.
A. Yes. The SBA must review your financial statement and one for each partner, officer, director and stockholder with 20 percent or more ownership. The SBA requires the principals of the business to personally guarantee repayment of the loan and, in some instances, to secure the loan by pledging additional collateral.
A. The SBA will review the availability of such assets to determine if part or all of your economic injury might be remedied by using such assets. The business and its principal owners must use their own resources to overcome the economic injury to the greatest extent possible without causing undue hardship.
A. Private credit sources must be used as much as possible to overcome the economic injury. The SBA can provide EIDL assistance only to the extent the business (and its principals) cannot recover by using its own resources and normal lending channels.
A. You may not use funds to pay cash dividends or bonuses, or for disbursements to owners, partners, officers or stockholders not directly related to the performance of services for the business. The SBA will not refinance long-term debts or provide working capital that was needed by the business prior to the disaster.
A. Collateral is required for all EIDL loans over $5,000. SBA takes real estate as collateral where it is available. Applicants do not need to have full collateral; SBA will take what is available to secure each loan.
A. The SBA will assess your financial situation and will set loan terms based on your needs and repayment ability. The maximum maturity for disaster loans is 30 years.
A.In order for the SBA to compare your financial condition and operating results preceding the disaster with those during and since the disaster period,
A. No. An EIDL is intended to help you maintain a secure financial condition until your business or private, non-profit organization is back to normal. Your loan will be made for specific and designated purposes. Remember that the penalty for misusing disaster funds is immediate repayment of one- and-a-half times the original amount of the loan. The SBA requires that you keep receipts and good records of all loan expenditures for three years following receipt of your SBA loan.
A. No. Neither lack of profit or loss of anticipated sales alone is sufficient to establish substantial economic injury. Substantial economic injury occurs only when you cannot meet current obligations because of the disaster. Indicators of economic injury might be a larger than normal volume of receivables, a lower sales volume, slow inventory turnover, and the development of delinquencies in trade payables, current accruals and debt payments.
A. Yes, except that religious and certain other private, non-profit organizations are not eligible.
A. That depends on how soon you file a complete SBA loan application. We must calculate the amount of economic injury and the working capital and other needs of your business or private, non-profit organization. We must be satisfied that you can repay the loan out of business operations, and we must take reasonable safeguards to help ensure the loan is repaid. The SBA loan application asks for the information we need. Since we process applications in the order received, the faster you can return it with all the needed information, the faster we can work on it. We try to make a decision on each application within 21 days. Be sure the information in your application is complete; missing information is the biggest cause of delay.
A. Loans greater than $5,000 have to be secured. After we approve a request, we will tell you what documents are needed to close the loan. When we receive these documents, we can order the checks. You will receive the money in installments, as it is needed.
A. If the applicant is in a special flood hazard area, it must have flood insurance before we can disburse a loan. If the applicant was legally required to maintain flood insurance but did not, a disaster loan will not be made
Farm Emergency Loans
Emergency loans to help producers recover from production and physical losses due to drought, flooding, other natural disasters, or quarantine.
Home and Property Disaster Loans
Physical disaster loans are for permanent rebuilding and replacement of uninsured or underinsured disaster- damaged privately-owned real and/or personal property. SBA’s physical disaster loans are available to homeowners and renters. Within For Homeowners and Renters, we’ll review:
If you are in a declared disaster area and are the victim of a disaster, you may be eligible for financial assistance from the U.S. Small Business Administration - even if you don't own a business. As a homeowner, renter and/or personal-property owner, you may apply to the SBA for a loan to help you recover from a disaster.
As an individual, there is one basic loan, with two purposes, available to you:
A. The amount of money that the SBA will lend you will be based upon the actual cost of repairing or replacing your home and/or personal property, minus any insurance settlements or other reimbursements or grants. The total loan amount is subject to the limits set out above.
A. In certain cases, yes. The SBA can refinance all or part of prior mortgages, evidenced by a recorded lien, when the applicant: 1) does not have credit available elsewhere; 2) has suffered substantial uncompensated disaster damage (40 percent or more of the value of the property); and 3) intends to repair the damage. An SBA disaster loan officer can provide more detailed information on your specific situation.
A. The necessary information is specified in the loan application. In all cases, it includes an itemized list of personal property losses with the repair or replacement cost of each item. It also includes permission for the IRS to give the SBA information from your last two federal income tax returns. If you have pictures of the damaged property, you can include them as well.
A. Yes. Once you have returned your loan application, an SBA loss verifier will visit you to determine the extent of the damage and the reasonableness of the loan request.
A. That depends on how soon you file a complete SBA loan application. The SBA disaster relief program is not an immediate emergency relief program such as Red Cross assistance, temporary housing assistance, etc. It is a loan program to help you in your long-term rebuilding and repairing. To make a loan, we have to know the cost of repairing the damage, be assured that you can repay the loan, and take reasonable safeguards to help make sure the loan is repaid. The sooner you return the completed loan application, the sooner the SBA can process the application. The SBA tries to make a decision on each application within 14 days. Make sure your application is complete; missing information is the biggest cause of delay.
A. Loans over $14,000 have to be secured. We won't decline a loan just because you do not have enough collateral, but we do ask for whatever collateral is available. This means that after a loan is approved there are other steps you must take. Usually, the security consists of a first or second mortgage on the damaged real estate. After we approve the loan, we will tell you what documents are needed to close the loan. You return the loan-closing documents to us, we can order the checks. You will receive the money in installments as you need it to repair or replace the damage.
A. No. If you do not know how much of your loss will be covered by insurance or other sources, the SBA will consider making a loan for the full amount of the loss, up to our loan limits, provided that you assign the insurance check to the SBA to reduce the amount of the loan.
A. No. You might miss the deadline for filing your application while waiting for a contractor's estimate. If you have an estimate, include it. The SBA will verify any damage estimates listed on your loan application. Also,the sooner you file a completed application, the sooner the SBA can process it.
A. No. The disaster loan is intended to help you return your property to the same condition it was in before the disaster. Your loan will be made for specific and designated purposes. Remember that the penalty for misusing disaster funds is immediate repayment of one-and-a-half times the original amount of the loan. The SBA requires that you obtain receipts and maintain good records of all loan expenditures as you restore your damaged property and that you keep these receipts and records for three years.
A. If you are unable to obtain a building permit to rebuild or replace your home at its original site, the cost of relocating your home might be included in the loan amount. If, however, you decide to relocate your home without being required to, an SBA loan can be obtained only for the exact amount of the damage. SBA can not make loans involving some relocations. An SBA disaster loan officer can provide more detailed information on your specific situation.
A. You may apply to the SBA for a loan to cover the damage to your home and its contents only. But it may be in your interest to seek assistance first from the U.S. Department of Agriculture for all your damage.
A. No, not as homes. They may be eligible for business disaster loans under certain conditions
A. Yes. Generally, loans will not be made for damage to personal pleasure boats, planes, recreational vehicles, antiques, collections, etc. Also, amounts for landscaping, family swimming pools, etc., are limited.
A. The SBA does not have a minimum monthly payment. Payments vary depending upon income and expenses, size of family and other circumstances that may affect your repayment ability. Generally, the first payment is not due until five months after the date of the loan.
A. Yes, but your own labor and that of family members cannot be included. Amounts paid to others and any equipment rental can be listed as part of repairs to realestate. Remember that the maximum loan limit on realestate damage is $200,000, and debris removal is included in the limit.
A. Yes. Loans are made without regard to age.
A. No. The application form asks you the same information that any bank would request before lending you money. If you need help, SBA disaster personnel are available to explain the forms and give you assistance at no charge. You may use the services of accountants or attorneys if you wish, but be sure they are reliable and that their fees are reasonable. If you choose to use an attorney or an accountant, you must report those fees on your SBA loan application form.
A. Generally, yes. The loan would be only for uninsured losses.
A. If you are in a special flood hazard area, you must have flood insurance before we can disburse a loan. The amount of insurance required is the insurable value ofthe property in the special flood hazard area but not to exceed the maximum flood insurance available under the National Flood Insurance Act.
Military Reservist Economic Injury Disaster Loan
This loan program provides funds to eligible small businesses to meet its ordinary and necessary operating expenses that it could have met, but is unable to meet, because an essential employee was "called-up" to active duty in their role as a military reservist.
The Filing Period for small businesses to apply for economic injury loan assistance begins on the date the essential employee receives a notice of expected call-up and ends 1 year after the essential employee is discharged or released from active duty.
No. The application form asks you for the same information about the business and its substantial owners and managers that generally is required for a bank loan. If you need help, SBA personnel will explain the forms and give you assistance at no charge. You may use the services of accountants, attorneys, or other representatives if you wish, but be sure they are reliable and that their fees are reasonable. You must report the use of a representative and the fees charged on your loan application.
No. The resources of the business and its principals will be considered in determining the ability of the business to recover without the assistance of the Federal government.
The filing requirements are listed at the beginning of the application. In addition to the financial information required you would normally submit for any loan, your application package must also include the following
An essential employee is an individual (whether or not an owner of the small business) whose managerial or technical expertise is critical to the successful day-to-day operations of the small business.
Period of military conflict means (1) a period of war declared by Congress, or (2) a period of national emergency declared by the Congress or the President, or (3) a period of contingency operation. A contingency operation is designated by the Secretary of Defense as an operation in which our military may become involved in military action, operations, or hostilities (e.g., peace keeping operations).
Substantial economic injury means that your business either has been or will be adversely impacted by the deployment of the military reservist and that the business is (1) unable to meet its financial obligations as they mature, and/or (2) unable to pay its ordinary and necessary operating expenses, and/or (3) the small business is unable to market, produce or provide a service ordinarily marketed, produced or provided.
To make a loan, we must be satisfied that the business can repay the loan from its operations and take reasonable safeguards to help ensure the loan is repaid. Since we process applications in the order received, the faster you return the application with all the needed information, the faster we can work on it. We try to make decisions on each application within 7 to 21 days. Final approval will not occur until the essential employee has received official call-up orders. Be sure the information in your application is complete; missing information is the biggest cause of delay.
Loan funds will be disbursed only after the essential employee has been officially called to active duty. After we approve the loan, we will tell you what documents are needed to close the loan. Once we receive these documents, we can disburse the funds
The Farm Service Agency also provides a disaster assistance guide for farmers and ranches for natural disaster losses, resulting from drought, flood, fire, freeze, tornadoes, pest infestation, and other calamities.
Disaster Unemployment Assistance provides financial assistance to individuals whose employment or self-employment has been lost or interrupted as a direct result of a major disaster declared by the President of the United States. Before an individual can be determined eligible for Disaster Unemployment Assistance, it must be established that the individual is not eligible for regular unemployment insurance benefits (under any state or federal law). The program is administered by states as agents of the federal government.
In order to qualify for this benefit your employment or self-employment must have been lost or interrupted as a direct result of a major disaster and you must have been determined not eligible for regular state unemployment insurance.
Payment will be made to unemployed U.S. nationals and qualified aliens, who as a direct result of a major disaster:
No longer has a job.
Is unable to reach the place of work.
Was to commence work and does not have a job or is unable to reach the job.
Has become the breadwinner for the household because the head of household has died or become incapacitated (If you became a breadwinner due to the death of a self-employed individual, you are considered an unemployed worker for DUA purposes).
Cannot work because of a disaster-incurred injury.
With exceptions for persons with an injury and for self-employed individuals performing activities to return to self-employment, individuals must be able to work and available for work, which are the same requirements to be eligible for state unemployment insurance benefits.
Disaster Unemployment Assistance is available to individuals for weeks of unemployment beginning with the first week following the date the major disaster began and for up to 26 weeks after the major disaster was declared by the President, as long as their unemployment continues to be a result of the major disaster.
The maximum weekly benefit amount is determined under the provisions of the state law for unemployment insurance in the state where the disaster occurred.
Filing a Claim
Claims should be filed in accordance with the state's instructions published in announcements about the availability of Disaster Unemployment Assistance, or contact the State Unemployment Insurance agency.