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Who can use an SBA disaster loan?

Who can use an SBA disaster loan?
Who can use an SBA disaster loan?

The Small Business Administration (SBA) offers low-interest loans to help small and medium-sized businesses deal with the crisis in the event of declared disasters. But, Who can use an SBA disaster loan? En Hispanic Entrepreneurs We give you all the information so that you are clear to whom and why each type of loan benefits. 

Emergency protection

Remember that the economic cost of rebuilding in the event of a disaster can be a serious blow to business finances. For this reason you have to manage and analyze the various ways to protect your investment and thus be able to continue operating. 

First of all, you have to assess the risk, that is, the vulnerabilities of the company or what type of disaster is most likely to affect it. This self-assessment is essential to make the process of reopening easier. 

Consider the risks to your business from common hazards like hurricanes, floods, wildfires, cyber attacks, and civil unrest.

Then a plan is developed that fits the needs and operations of the business. Make it easy to access and encompass priorities. Finally, execute the plan with the staff so that when there is a disaster everyone is prepared.

Types of disaster loans

  • Physical Damage Loans: They are awarded to the owner of the business that has suffered damage to its structure due to being located in the disaster area. Owners can request up to $ 200 to repair or replace their main home. 
  • Damage Reduction Assistance: They are the funds to cover expenses operations of small and medium-sized enterprises after a disaster.
  • EIDL loans: It is the help that businesses and non-profit organizations that have had damage to their personal property receive.
  • Loans for Reservists: They are delivered to eligible midsize businesses with expenses that compensate active duty military workers. In this case, the maximum amount awarded is two million dollars and is limited according to the economic damage. 

Who can use an SBA disaster loan?

Not all businesses or individuals can benefit from the SBA disaster loan. To do so, it must comply with a series of requirements that the agency demands in order to grant the resources.

Among those that can benefit are small businesses such as startups, an American agribusiness with fewer than 500 employees, and non-profit organizations. They must apply for the EIDL loan for Covid-19 if they suffer significant economic damage. Applies in any state of the country. 

You can use the EIDL loan for Covid-19 for working capital, as well as for operating expenses such as continuation of medical care, utilities, rent and cancellation of fixed debts. 

While, for loans of the rest of the types of disasters enter the companies or private non-profit organizations located in the zones declared as disaster. Also affected homeowners or renters.

This loan is applied to cover expenses not covered by insurance or the Federal Emergency Management Agency. Also for personal and business use, and for operating expenses that could have been covered had the disaster not occurred. 

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