Don’t Wait for Insurance to Apply for a Disaster Loan
ATLANTA (January 31) – The U.S. Small Business Administration (SBA) is encouraging Tennessee businesses and residents affected by the severe storms, straight-line winds, and tornadoes on Dec. 10-11, 2021, to submit their loan applications for physical damages even if they have not settled with their insurance company.
SBA disaster loans can cover the difference between an insurance settlement and what is needed to fully recover. If a survivor has not settled their insurance claim, SBA will consider making a loan for the total loss up to its loan limits. The insurance settlement will be used to reduce or repay the loan.
“Waiting to file an SBA application could cause unnecessary delays in receiving disaster assistance, and survivors may miss the March 15 application deadline for physical disaster loans. Submitting the loan application is an essential part of the disaster recovery process,” said Kem Fleming, director of SBA Field Operations Center East.
As of Jan. 27, the SBA had already approved 23 disaster loans for a total of $1,903,800. The first loan payment due date is five months from the date of the promissory note.
The disaster declaration covers Cheatham, Davidson, Dickson, Gibson, Henderson, Henry, Lake, Obion, Stewart, Sumner, Weakley, and Wilson counties in Tennessee, which are eligible for both Physical and Economic Injury Disaster Loans from the SBA. Small businesses and most private nonprofit organizations in the following adjacent counties are eligible to apply only for SBA Economic Injury Disaster Loans: Benton, Cannon, Carroll, Chester, Crockett, Decatur, DeKalb, Dyer, Hardin, Hickman, Houston, Humphreys, Macon, Madison, Montgomery, Robertson, Rutherford, Smith, Trousdale and Williamson in Tennessee, Allen, Calloway, Christian, Fulton, Graves, Hickman, Simpson and Trigg in Kentucky, and New Madrid and Pemiscot in Missouri.
Businesses and private nonprofit organizations of any size may borrow up to $2 million to repair or replace disaster-damaged or destroyed real estate, machinery and equipment, inventory, and other business assets. Applicants may be eligible for a loan amount increase up to 20 percent of their physical damages, as verified by the SBA, for mitigation purposes. Eligible mitigation improvements may include a safe room or storm shelter, sump pump, elevation, retaining walls, and landscaping to help protect property and occupants from future damage caused by a similar disaster.
For small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations, the SBA offers Economic Injury Disaster Loans to help meet working capital needs caused by the disaster. Economic Injury Disaster Loan assistance is available regardless of whether the business suffered any physical property damage.
Disaster loans up to $200,000 are available to homeowners to repair or replace disaster-damaged or destroyed real estate. Homeowners and renters are eligible for up to $40,000 to repair or replace disaster-damaged or destroyed personal property.
Interest rates are as low as 2.83 percent for businesses, 1.875 percent for nonprofit organizations and 1.438 percent for homeowners and renters, with terms up to 30 years. Loan amounts and terms are set by the SBA and are based on each applicant’s financial condition.
Applicants may apply online using the Electronic Loan Application (ELA) via SBA’s secure website at https://disasterloanassistance.sba.gov/ela/s/ and should apply under SBA declaration # 17310, not for the COVID-19 incident.
To be considered for all forms of disaster assistance, applicants should register online at DisasterAssistance.gov or download the FEMA mobile app. If online or mobile access is unavailable, applicants should call the FEMA toll-free helpline at 800-621-3362. Those who use 711-Relay or Video Relay Services should call 800-621-3362.
Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or by sending an email to DisasterCustomerService@sba.gov. Loan applications can be downloaded from sba.gov/disaster. Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
The filing deadline to return applications for physical property damage is March 15, 2022. The deadline to return economic injury applications is Oct. 14, 2022.
About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit sba.gov.