Eligible businesses, homeowners encouraged to apply by SBA
Damaged businesses and residents affected by the July 19 tornadoes in Jasper, Grundy, Hardin, Marshall, Poweshiek, Story and Tama Counties have been offered low-interest federal disaster loans from the U.S. Small Business Administration (SBA).
According to a July 30 news release, the Washington, D.C.-based government agency acted under its own authority to declare a disaster in response to a request received by Iowa Gov. Kim Reynolds on July 25, allowing businesses, entrepreneurs, most private nonprofit organizations, renters and homeowners, whose property was destroyed or damaged in the affected counties, to receive assistance.
SBA Administrator Linda McMahon said in the release, “SBA is strongly committed to providing Iowa with the most effective and customer-focused response possible, and we will be there to provide access to federal disaster loans to help finance recovery for businesses and residents affected by the disaster. Getting our businesses and communities up and running after a disaster is our highest priority at SBA.”
Representatives of SBA have set up a Disaster Loan Outreach Center Aug. 1 at Fisher Community Center, 709 S. Center St., in Marshalltown. From 8 a.m. to 5 p.m. Monday through Friday, officials will be able to meet with those affected by the storm in person to answer questions about SBA’s disaster loan program and walk through the application process to its completion.
The deadline for filing a physical property damage application is Sept. 28. The economic injury application filing deadline is April 30, 2019.
SBA Public Information Officer Burl Kelton said financial loans can sometimes be overlooked by individuals and businesses who are in the middle of recovering their losses or trying to return things back to normal, especially small businesses.
“Because this is a disaster-only type of situation — unless they’ve been through it before — a lot of times they don’t know about it,” Kelton said. “We go through the whole process of trying to get the word out and let folks know that it’s here.”
Businesses of all sizes, as well as private nonprofit organizations like charities, churches and private universities, are eligible for SBA disaster loans. Borrowed funds up to $2 million can be used to repair or replace disaster-damaged property owned by the eligible business owners, including real estate, equipment, machinery, supplies and inventories. Home loans are limited up to $200,000 for repair and replacement of real estate and up to $40,000 to repair or replace personal property.
SBA can also lend additional cash reserves to businesses and homeowners to improve the protection, prevention or minimization of the same type of disaster damage from happening again.
Small businesses — including small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofits — are offered Economic Injury Disaster Loans (EIDL) to assist in meeting working capital needs caused by a declared disaster. Economic injury assistance, the news release states, is available regardless of whether the business suffered any property damage.
Acceptable credit history, ability to repay all loans and collateral for physical loss loans and EIDL loans exceeding $25,000 are required by all applicants. Loan terms up to a maximum of 30 years; the only exception being a maximum of seven years for businesses with credit elsewhere. Installment payment amounts and their maturity will be set by SBA and be based upon individual borrower’s abilities to repay loans.
Kelton said interest rates are held at two levels: no credit elsewhere and credit elsewhere individuals. The distinction between the two is determined by whether the business or homeowner has available resources to recover. Typically, SBA interest rates are higher by those who have credit elsewhere.
No credit elsewhere home loan interest rates for this particular disaster are set at 1.938 percent; credit elsewhere rate is set at 3.875 percent. Business loans for no credit and credit interest rates are 3.610 and 7.22 percent; economic injury loans for businesses and small agricultural cooperatives are also set at 3.610 percent. Nonprofit loan interest rates are fixed at 2.5 percent.
“It’s voluntary and you apply for however much you’re eligible for and there’s no obligation,” Kelton said. “So, if you’re in the processing of trying to get a livable space or take care of some other things, you can make that application and find out what you’re eligible for … There’s no rush. We can work with folks after the loan application and they find out what they’re eligible for to determine what would work best for them. It’s another tool in the recovery toolbox and could be a real big help.”
For more information, those affected by tornado damages in the aforementioned counties are asked to call SBA’s Disaster Assistance Customer Service Center at 800-659-2955, apply online using the Electronic Loan Application at https://disasterloan.sba or visit the Disaster Loan Outreach Center to speak with an SBA representative in Marshalltown.
Contact Christopher Braunschweig at 641-792-3121 ext. 6560 or firstname.lastname@example.org