SBA’s Disaster Assistance
Program
Helping Survivors Recover From Disasters
Disaster damaged business
Reconstructed business using SBA funds
A Presentation for the Florida Housing Coalition
May 17, 2019
Agenda
Types of SBA Disaster Declarations
Types of SBA Disaster Loans
Why Apply for an SBA Disaster Loan?
About SBA’s Disaster Assistance Program
Three Step Process
Myths Versus Fact
Statistics for FL Hurricanes Irma and Michael
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ODA Mission Statement
To provide low interest disaster loans to businesses of all sizes, private nonprofit
organizations, homeowners and renters to repair or replace real estate, personal
property, machinery & equipment, inventory and business assets that have been
damaged or destroyed in a declared disaster.
About SBA’s Disaster Assistance Program
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SBA’s History in Making Disaster Loans
The SBA’s low-interest loan program was designed by Congress to help
those affected by unforeseen catastrophic events to recover with as little
adverse impact as possible.
SBA has been making disaster loans since 1953, and has approved
more than $63.9 billion in disaster loans to more than 2.1 million
businesses, homeowners, and renters.
In fiscal year 2018, SBA approved 140,240 loans for over $6.9 billion in disaster loans
for businesses and residents nationwide.
For fiscal year 2019 thru April, SBA has approved 37,217 loans for over
$1.9 billion.
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As of the close of business on May 9, 2019
Florida Hurricane Irma
Type of Loans Number of Loans Dollar Amount
Homes
32,956
$1,116,719,400
Businesses
4,379
$331,924,400
Total
37,335
$1,448,643,800
Florida Hurricane Michael
Type of Loans Number of Loans Dollar Amount
Homes
11,373
$516,295,300
Businesses
1,220
$120,964,500
Total
12,593
$637,259,800
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Statistics for FL Hurricanes Irma and Michael
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AP Photo/US Coast Guard
Types of SBA Disaster Declarations
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A Disaster Occurs, What’s Next?
Initial Process for Presidential Declarations for Individual Assistance and SBA
Administrative Declarations
The Governor contacts FEMA and/or SBA to request a preliminary damage assessment
(PDA) or disaster damage survey.
SBA and/or FEMA assesses the damage and reviews
the result of disaster damage survey with the State.
Based on results Governor may request a presidential
or SBA declaration.
The request for a disaster declaration is either
approved or denied.
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Presidential Declaration for Individual Assistance (I/A)
• If the President declares a major disaster declaration for
Individual Assistance, SBA’s disaster loan program is
automatically activated.
• Small businesses, small cooperatives, small aquaculture businesses and most private
nonprofits of any size, can apply for working capital loans to cover their economic
injury losses.
President
Donald J. Trump
• Businesses of all sizes including private, nonprofit
organizations, homeowners and renters are eligible to
apply for their uncompensated physical losses.
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If the President declares a major disaster declaration for Public Assistance, SBA’s disaster
loan program is activated only for eligible private, nonprofit organizations for physical
damage and economic injury.
Presidential Declaration for Public Assistance (PA)
Religious Organizations
Community Centers
Nonprofit Organizations
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Hurricane Michael - Panama City, FL
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Administrative (Agency) Declarations
When the PDA indicates damages are insufficient for a
Presidential declaration, the Governor can request an
Administrative (Agency) declaration through the SBA
Administrator.
Administrative (Agency) Declarations require:
At least 25 homes and/or businesses in a county with
uninsured losses of 40% or more of their estimated fair
market value.
Acting SBA
Administrator
Chris Pilkerton
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Indicates that only SBA Disaster Loans for
economic injury are available in
“Contiguous” Counties.
Indicates that SBA Disaster Loans for physical
and economic injury losses
are available in the “Primary” County.
Indicates that SBA Disaster Loans for
physical and economic injury losses are
available in both the “Primary” County
and “Contiguous” Counties.
Differences in Presidential Versus Agency Declarations
The declared disaster area and eligibility is different.
Presidential declaration (IA)
SBA Administrative declaration
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Governor’s Certification
If a Governor certifies that at least five (5) small businesses in a disaster area have
suffered substantial economic injury as a result of the disaster, and need financial
assistance not available on reasonable terms, SBA activates its Economic Injury
Disaster Loan (EIDL) program only.
These working capital loans may be used to pay fixed debts, payroll, accounts
payable, and other bills that could have been paid had the disaster not occurred.
The loans are not intended to replace lost sales or profits.
Note: Physical Disaster Loans are not available in this
type of declaration.
The filing deadline is 9 months from the date of the declaration.
CBS News
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Secretary of Agriculture Declarations
If the Secretary of Agriculture designates an area an agricultural
disaster, SBA automatically activates its Economic Injury Disaster
Loan (EIDL) program.
Loans are made available to eligible small businesses, small
cooperatives, small aquaculture businesses and most private
non-profits of any size that have suffered substantial economic
injury as a result of the declared disaster.
These working capital loans may be used to pay fixed debts,
payroll, accounts payable, and other bills that could have been
paid had the disaster not occurred. The loans are not intended
to replace lost sales or profits.
This declaration is for Economic Injury Disaster Loans (EIDLs)
only. The filing deadline is 8 months from the date of the
declaration.
Farmers and
ranchers are not
eligible.
However, both
farm-related and
non-farm related
small businesses
are eligible to
apply.
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1) Physical Home
2) Physical Business
3) Economic Injury
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Types of SBA Disaster Loans
Types of Loans Borrowers Purpose Max. Amount
Business Loans “Physical” Businesses and
private nonprofits
Repair or replace real
estate, equipment,
furniture, etc.
$2 million *
Economic Injury Loans Small businesses and
private nonprofits
Economic injury
disaster loans or
working capital loans
$2 million *
Home Loans Homeowners Repair or replace real
property
$200,000
Home Loans Homeowners and
renters
Repair or replace
personal property
$40,000
Mitigation Businesses, private
nonprofits and
homeowners
Mitigate / prevent
future loss to real
property
20% of verified
physical damage.
Homeowners is limited
to $200,000
*The maximum business loan is $2 million, unless the business qualifies as a Major
Source of Employment (MSE).
SBA Disaster Loan Limits
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Eligibility
• Damaged property/business must be in a declared county.
Credit History
• Applicants must have a credit history acceptable to SBA.
Repayment
• Applicants must show the ability to repay the SBA loan.
Requirements for Loan Approvals
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• Physical loans over $25,000 require collateral.
• Economic injury loans over $25,000 require collateral.
(Up to $50,000 unsecured disaster business loans-combined physical
and economic injury loan funds).
• SBA will not decline a loan for lack of collateral, but requires collateral
if it’s available.
Collateral Requirements
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Low interest rates
Cash flow lender
No equity required
Flexible terms-up to 30 years
No prepayment penalty
Funds are available prior to an
insurance settlement
No closing costs
May be eligible for refinancing or
relocation
May apply for mitigation funds
to protect against future events
First payment deferred
Don’t need damage estimate to
apply
Federal/State assistance may
stop
Loan can be modified
No obligation to take the loan if
approved
May be eligible for referral to
grant program
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When disaster survivors need to borrow to repair uninsured damages, the low-
interest rates and long-terms available from SBA make recovery affordable.
Why Apply for an SBA Disaster Loan?
Hurricane Michael Response
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• After registering with FEMA for assistance, survivors may be referred to the U.S.
Small Business Administration (SBA). Homeowners and renters should submit
an SBA disaster home loan application, even if they think they will not qualify.
• If SBA cannot approve the loan request, survivors may be referred back to FEMA
and considered for grants and programs that could include assistance for
disaster-related car repairs, clothing and household items.
• SBA loans cover disaster losses that are not covered by insurance or recoveries
from other sources. It is not necessary to wait for your insurance settlement
before applying with SBA.
FEMA Referrals to SBA
Generally, FEMA’s grant funds are designated to
make the applicant’s household safe, sanitary
and functional. When a home is unlivable,
FEMA’s grant funds are allocated for rental
assistance.
SBA’s disaster loan funds are designed to
provide for full recovery (repairs and
replacement needs) up to the SBA loan limits,
and are geared toward long term recovery.
FEMA = grants
SBA = loans
For homeowners and renters only.
FEMA versus SBA – What’s the Big Difference?
There are three ways to apply:
• Apply on-line at SBA’s secured website:
DisasterLoan.sba.gov;
• Apply in person at a recovery center; or
• Submit an application by mail.
In Presidential declarations, survivors should first register with FEMA at fema.gov, 1-800-
621-3362 or disasterassistance.gov
STEP 1:
Apply for Loan
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Three Step Process
Upon receipt of completed loan application, losses are
estimated* and the file is processed to a decision.
If approved, loan documents are forwarded to borrower.
The applicant is advised of appeal rights, if declined.
* Damages are initially estimated by desktop loss verification.
The Three Step Process: Disaster Loans
STEP 2:
Property Verified
and
Loan Processing Decision Made
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Disbursements are generally made in installments after required
loan closing documents are submitted.
Generally, the initial disbursement is $25,000, the maximum
unsecured amount.
The Three Step Process: Disaster Loans
STEP 3:
Loan Closed and Funds Disbursed
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Resource Partners are able to:
• Help complete SBA disaster loan applications and prepare financial
statements at no cost.
• Provide follow-up assistance to businesses whose disaster loan
applications are either approved, declined or withdrawn.
• Provide management and counseling services to disaster business loan
applicants.
• Assist in finding suitable locations for Business Recovery Centers and
Disaster Loan Operations Centers.
SBA Resource Partners
(SBDCs, WBCs, SCORE, Chambers of Commerce, etc.)
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Hurricane Michael -Panama City, FL
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MYTH: The Small Business Administration (SBA) is part of the Federal Emergency Management
Agency (FEMA) and under the Department of Homeland Security (DHS).
FACT: SBA is an independent federal agency.
MYTH: The Small Business Administration (SBA) only offers disaster loans to businesses.
FACT: SBA’s disaster loan program is the only form of SBA assistance not limited to small businesses.
SBA offers low-interest loans to businesses of all sizes, nonprofit organizations, homeowners and
renters.
MYTH: Applicants must go through a bank to apply for an SBA disaster business or and SBA disaster
home loan.
FACT: Applicants apply directly with SBA for disaster loans. Loan funds are disbursed from the U.S.
Treasury.
Myths Versus Fact
Hurricane Michael – Mexico Beach, FL
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MYTH: SBA’s disaster loans are available any time there is a disaster.
FACT: SBA’s disaster loans are only offered when there is a federal disaster declaration. Eligible
applicants must be in a declared county/independent city.
MYTH: FEMA is the lead agency in all disaster declarations.
FACT: SBA can approve a disaster declaration independent of FEMA. A majority of disasters are
SBA-only declarations in which SBA’s disaster loans are the only form of recovery other than
insurance. FEMA is the lead agency on presidentially declared disasters.
Myths Versus Fact
MYTH: Disaster survivors can apply once a federal disaster declaration is made.
FACT: Disaster survivors should apply BEFORE the filing deadline.
Hurricane Michael – Mexico Beach, FL
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Contact for SBA Partners:
Michael Lampton
Public Affairs Manager
(404) 331-0333
michael.lampton@sba.gov
SBA Field Operations Center - East
Communications Department
(Federal Regions I-V)
Atlanta, GA
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For More Information, the Public Should
Contact SBA’s Customer Service Center at:
1-800-659-2955 / 1-800-877-8339 (TTY)
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What Would You Like to Know?
More information concerning
SBA and its programs
visit our website at:
sba.gov/disaster
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