Disaster Loan Application; What Where and How of the Procedure

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Disasters are common to hit each business or corporation whether small or larger. However, when this happens it’s not the time to sit back and regret, rather stepping ahead to find a way towards a solution can make things easy. This is the time when you need to think about applying for disaster loans. When  you want to recover or replace your disaster damaged property, these loans are handy. I let you imply the plan. 

Before moving ahead to learn about the proper way of applying for disaster loans, let us first make some important things clear; what are disaster loans? How do they work? How useful are they? Who provides disaster loans? And how to apply to get the most benefit out of it. 

What are disaster loans? 

Disaster loans are a great form of Federal assistance which is provided to people to help them repair their damaged properties. This is a useful form of loan that is in service for all the private sector’s business owners. Also, it is not only limited to small business owners, rather, any owner of a corporation or organization whether small or large can easily apply for the loan and can get the most benefit out of it.  

Types of Disaster Loans 

There is not only one type of disaster loan that you can go for. However, there is an extensive list of options for the disaster loans that you can choose to go for in order to get disaster assistance. Following are some most common types of disaster loans that may be helpful to you depending upon various conditions: 

Physical Damage Loans: These are the types of loans that you can choose to go for when you need the loans to repair, recover or replace any type of physical assets that are damaged in any form of the declared disaster. These types of loans are useful in several emergency conditions when your physical assets are at stake. 

Mitigation Assistance:  During any form of a declared disaster, when you experience any damage to your small businesses then you can opt to apply for this type of disaster loan. These loans are helpful in providing you the funding to cover all the expenses that are operated by any type of small business. 

Economic Injury Disaster Loans: These are the most common type of disaster loans that many business persons and organization owners choose to apply for. These are the types of loans that provide financial help to all kinds of small businesses and other non-profit organizations that have severely suffered from any kind of disaster declared in a certain area. Also, these loans are provided to owners of the organizations and small businesses when any damage is done to their personal property including home. Money, charts, and graphs

Military Reservist Loans: This type of loan is provided to those types of small businesses that are operating all their expenses to make up for their employees who are on active duty leave. Military helmet and loan application

How useful are the Disaster Loans? 

Disaster loans that have been introduced to help the disaster stricken businesses persons are of much importance. These loans are very useful as they help these people again meet their previous standards of financial success and glory once again. 

Keeping this not a secret anymore, here we present to you how much actual help you can get from these loans. These disaster loans can provide to you financial assistance up to almost $2 million. However, the actual amount purely depends upon the strength of damage and amount of economic injury done to you. This amount is provided to any private sector business and also to those organizations which suffer substantial economic loss as a result of any disaster that has been declared. 

Under any such disasters, your business may experience substantial economic loss and fails to pay the debts, accounts payable, payrolls, and many other bills that are necessary to maintain the financial status of your business in the market, and also for its normal operation. Through these loans you can clear all the mentioned payables and can pull back your business back to a considerable level of success.  

Who Provides Disaster Loans? 

These small business loans are provided by the U.S Small Business Administration. SBA offers this affordable financial help to the businesses of all kinds present in private sectors, and also to all the non-profit organizations that are present in the declared disaster areas. 

SBA takes great care in keeping the interest value low, so that it does not become difficult for any private business owner or the non-profit organization to payback the loan in the given time. This is a great initiative by SBA that makes the lives and career of disaster stricken business people easy. 

It provides a loan of up to $2 million to repair the following: 

  • Real estate that has been destroyed or damaged
  • Any damage done to machinery or equipment 
  • Any harm that has been caused to the inventory or the other assets of the business. 

Considering all the working capital needs of that are caused by any form of a declared disaster, SBA makes this process of getting the loan easy for many including: 

  • Small businesses that are actively engaged in aquaculture 
  • Small agricultural cooperatives 
  • Many private and non-profit organizations regardless of their sizes 
  • Any other small businesses 

Who is eligible For Disaster Loans?

Although these loans are provided by SBA to any disaster stricken organization or small businesses, there is still an eligibility criterion that need to be kept in mind before making up your mind to go for the disaster loan application. It is always helpful to get a complete knowledge of all the relevant things before getting into the procedure. 

So, to qualify for the disaster loan from SBA you must be a: 

  • Non-profit 501 (c)(3) organization or any small business that has only 500 or even fewer employees in working 
  • Independent contractor or sole proprietor 

In addition to these, you must also be able to present that your business or organization has been negatively impacted by the disaster and that your company is strictly in need of the loan. Also, your company must be located in a disaster area. SBA never checks for your collateral, rather there still are chances that it may check your personal or business credit card to develop the trust for your creditworthiness. However, if you don’t have enough property to serve as collateral, it will still won’t decline your disaster loan application and may ask you to present any form of collateral that is available with you. It can be a real estate that is originally owned by the business’ principles 

These are some simple things mentioned by SBA as must to have whenever you plan to apply for the disaster loan to recover your financial status. If you qualify for these things, then be confident to apply for the loan as you stand upon the eligibility criteria for applying for the disaster loan.  

Proper Way of applying For Disaster Loans

There is no hard and fast rule and strict regulations in the way of applying for any type of disaster loan.  However, the procedure of applying varies with the types of loans you are applying for. Following are some easy steps and procedure mentioned depending upon the types of loans: 

To apply for the Disaster Loans, you have to follow the below mentioned simple steps. 

  1. Visit the official SBA’s application page 
  2. Here you will be asked various questions about your business history. These questions may relate to; the length of the time your business has been in the market, The location of your business, schedule of liabilities, tax return related to your business and also the financial statement of your business. 
  3. Fill out the application by answering all the mentioned questions and submit your application. 

Just through following these simple steps you can easily apply for the disaster loans that may help you in your business recovery and in the maintenance of your business’ financial status in the market. 

Paycheck Protection Program Loans 

This type of disaster loan requires the most basic information about your business and also about your average monthly payroll. It also requires your plans for investing the amount of loan that you are applying for.  The easiest way to apply for the PPP loan is through an SBA lender. 

Although, applying for disaster loans is not as much difficult as most people think of it to be. Still, if you want to go for an effortless loan application process then we would suggest you to go for the online process. Follow the below mentioned simple steps to get easy and fastest access to the lenders: 

  1. Federal Emergency Management Agency Registration: Before you ever plan to begin your application process, make sure to obtain a FEMA registration number. This, you will get after registering with them. You can visit their official site to get the registration process done and obtain the registration number. 
  2. Collect Information: The application will need your social security number, contact number, lease information, FEMA registration number, financial information, and also the employer identification number. In addition to these, the application will also require you to complete IRS Form 4506-T which allows the SBA to get an access to all your tax returns. So, keep all the information with you ready before you sit down to fill the application to get the loan. 
  3. Complete the application: Complete you application by filling out all the necessary details required, including the declaration of the disaster. After completing filling the application, submit this application. Wait till the SBA reviews your application and the credit report. 
  4. SBA estimation process: After reviewing your application, SBA will draw an estimate of the total damage done to your property or the organization. 
  5. Loan Closing Documents: After that all the procedure has been done, make sure to complete all the loan closing documents that will be sent to you by SBA after reviewing our application with great care. After you have completed and signed the documents and SBA receives it, it will provide to you the initial amount within five days of the submission. You will get an estimated $25,000 for the physical damage and the same for the economic injury. 
  6. Case Manager assistance: SBA will assign a case manager to you that will make sure that you get the full loan amount. This loan manager will also assist you in completing all the loan conditions. 

So, here you are done with submitting the application, as well as the rest of the process that will help you to be confident in involving all the process. 

Process for the Repayment of Disaster Loan?

After getting the disaster loans, there comes a time when you have to repay it back, so you must know all the procedures of the repayment in order to avoid making any mistake. Following are the three main ways that you can choose from according to your own convenience. 

Through Phone 

You can easily pay back all the amounts simply call them on their number and get the procedure done. 

Online Repayment 

When considering the online procedure for the repayment of the loan, you can make a visit to their online site to make the recurrent payments or even one time whatever suits you the most. 

Through Mail 

The last method of repayment of the loan is through the mail. You can send a check of payment to the SBA along with the loan number that must be written on the check. Make sure to get the official mailing address of SBA before delivering your check to them. 

Keep in mind that, if you have taken the loan from SBA you would have to repay the loan directly to them. However, if you have lent a PPP loan then you will pay back the money to the lender that has provided you the loan in times of need.

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