U.S. Small Business Administration (SBA)
05/25/18 - Economic Injury
Loans are available to Texas and Louisiana nonprofits, for-profits, homeowners, and renters who have experienced physical and economic damages due to Hurricane Harvey. Applicants located in a designated disaster area may qualify for financial assistance in the form of loans.
-Texas Counties of: Aransas, Bee, Brazoria, Calhoun, Chambers, Colorado, Fayette, Fort Bend, Galveston, Goliad, Hardin, Harris, Jackson, Jasper, Jefferson, Kleberg, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Refugio, Sabine, San Jacinto, San Patricio, Victoria, Waller, and Wharton;
-For economic injury only in the contiguous Texas Counties of: Angelina, Austin, Bastrop, Brooks, Caldwell, DeWitt, Gonzales, Grimes, Jim Wells, Karnes, Kenedy, Lavaca, Lee, Live Oak, Polk, San Augustine, Shelby, Trinity, Tyler, Walker, and Washington;
-For economic injury only in the contiguous Louisiana parishes of: Beauregard, Calcasieu, Cameron, Sabine, and Vernon.
Types of Disaster Loans Available:
-Home Disaster Loans – Loans to homeowners or renters to repair or replace disaster-damaged real estate and personal property, including automobiles.
-Business Physical Disaster Loans – Loans to businesses to repair or replace disaster-damaged property owned by the business, including real estate, inventories, supplies, machinery and equipment. Businesses of any size are eligible. Private, nonprofit organizations such as charities, churches, private universities, etc., are also eligible.
-Economic Injury Disaster Loans (EIDL) – Working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, nonprofit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period.
Funding Mitigation Improvements:
If your loan application is approved, you may be eligible for additional funds to cover the cost of improvements that will protect your property against future damage. Examples of improvements include retaining walls, seawalls, sump pumps, etc. Mitigation loan money would be in addition to the amount of the approved loan, but may not exceed 20 percent of total amount of physical damage to real property, including leasehold improvements, and personal property as verified by SBA to a maximum of $200,000 for home loans. It is not necessary for the description of improvements and cost estimates to be submitted with the application. SBA approval of the mitigating measures will be required before any loan increase.
-SBA can refinance all or part of prior mortgages that are evidenced by a recorded lien, when the applicant (1) does not have credit available elsewhere, (2) has suffered substantial uncompensated disaster damage (40 percent or more of the value of the property or 50% or more of the value of the structure), and (3) intends to repair the damage.
-Businesses – Business owners may be eligible for the refinancing of existing mortgages or liens on real estate, machinery and equipment, up to the amount of the loan for the repair or replacement of real estate, machinery, and equipment.
-Homes – Homeowners may be eligible for the refinancing of existing liens or mortgages on homes, up to the amount of the loan for real estate repair or replacement.
You may use your SBA disaster loan to relocate. The amount of the relocation loan depends on whether you relocate voluntarily or involuntarily. If you are interested in relocation, an SBA representative can provide you with more details on your specific situation.
GrantWatch ID#: 182194
Loan Amount Limits:
-Business Loans – The law limits business loans to $2,000,000 for the repair or replacement of real estate, inventories, machinery, equipment, and all other physical losses. Subject to this maximum, loan amounts cannot exceed the verified uninsured disaster loss.
-Economic Injury Disaster Loans (EIDL) – The law limits EIDLs to $2,000,000 for alleviating economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by SBA, less business interruption insurance, and other recoveries up to the administrative lending limit. EIDL assistance is available only to entities and their owners who cannot provide for their own recovery from non-government sources, as determined by the U.S. Small Business Administration.
-Business Loan Ceiling – The $2,000,000 statutory limit for business loans applies to the combination of physical, economic injury, mitigation and refinancing, and applies to all disaster loans to a business and its affiliates for each disaster. If a business is a major source of employment, SBA has the authority to waive the $2,000,000 statutory limit.
-Home Loans – SBA regulations limit home loans to $200,000 for the repair or replacement of real estate and $40,000 to repair or replace personal property. Subject to these maximums, loan amounts cannot exceed the verified uninsured disaster loss.
By law, the interest rates depend on whether each applicant has Credit Available Elsewhere. An applicant does not have Credit Available Elsewhere when SBA determines the applicant does not have sufficient funds or other resources, or the ability to borrow from non-government sources, to provide for its own disaster recovery. An applicant, which SBA determines to have the ability to provide for his or her own recovery is deemed to have Credit Available Elsewhere. Interest rates are fixed for the term of the loan.
The interest rates applicable for this disaster are:
No Credit Available Elsewhere:
-Business Loans: 3.305%
-Nonprofit Organization Loans: 2.500%
-Economic Injury Loans - Businesses and Small Agricultural Cooperatives: 3.305%
-Economic Injury Loans - Nonprofit Organizations: 2.500%
-Home Loans: 1.750%
Credit Available Elsewhere:
-Business Loans: 6.610%
-Nonprofit Organization Loans: 2.500%
-Economic Injury Loans - Businesses and Small Agricultural Cooperatives: N/A
-Economic Injury Loans - Nonprofit Organizations: N/A
-Home Loans: 3.500%
The qualifying incident period is 8/23/2017 and continuing.
The law authorizes loan terms up to a maximum of 30 years. However, the law restricts businesses with credit available elsewhere to a maximum 7-year term. SBA sets the installment payment amount and corresponding maturity based upon each borrower’s ability to repay.
Business Physical Disaster Loans: Loans are available to to businesses. Private, nonprofit organizations such as charities, churches, private universities, etc., are also eligible.
Economic Injury Disaster Loans: Loans are available to small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, nonprofit organizations of all sizes.
Home Disaster Loans: Loans are available to homeowners or renters.
-Credit History – Applicants must have a credit history acceptable to SBA.
-Repayment – Applicants must show the ability to repay all loans.
-Collateral – Collateral is required for physical loss loans over $25,000 and all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but requires you to pledge what is available.
Insurance Requirements for Loans:
To protect each borrower and the Agency, SBA may require you to obtain and maintain appropriate insurance. By law, borrowers whose damaged or collateral property is located in a special flood hazard area must purchase and maintain flood insurance. SBA requires that flood insurance coverage be the lesser of 1) the total of the disaster loan, 2) the insurable value of the property, or 3) the maximum insurance available.
Restrictions on Loan Eligibility:
-Uninsured Losses – Only uninsured or otherwise uncompensated disaster losses are eligible. Any insurance proceeds which are required to be applied against outstanding mortgages are not available to fund disaster repairs and do not reduce loan eligibility. However, any insurance proceeds voluntarily applied to any outstanding mortgages do reduce loan eligibility.
-Ineligible Property – Secondary homes, personal pleasure boats, airplanes, recreational vehicles and similar property are not eligible, unless used for business purposes. Property such as antiques and collections are eligible only to the extent of their functional value. Amounts for landscaping, swimming pools, etc., are limited.
-Noncompliance – Applicants who have not complied with the terms of previous SBA loans may not be eligible. This includes borrowers who did not maintain flood and/or hazard insurance on previous SBA loans.
Note: Loan applicants should check with agencies / organizations administering any grant or other assistance program under this declaration to determine how an approval of SBA disaster loan might affect their eligibility.
The deadline for Physical Damage applications is October 24, 2017.
The deadline for Economic Injury applications is May 25, 2018.
Before starting your grant application, please review the funding source's website listed below for updates/changes/addendums/conferences/LOIs.
Apply Online: https://disasterloan.sba.gov/ela/LoanApplication/StartApplication
Disaster #: TX-00487 / Texas Declaration: #15274 and #15275
USA: Louisiana: Declared Disaster Areas; Texas: Declared Disaster Areas