SACRAMENTO, Calif. – Small nonfarm businesses in nine California counties are now eligible to apply for low‑interest federal disaster loans from the U.S. Small Business Administration, announced Francisco Sánchez, Jr., associate administrator for the Office of Disaster Recovery and Resilience at the Small Business Administration. These loans offset economic losses because of reduced revenues caused by Tropical Storm Hilary in the following primary county that occurred Aug. 19 - 20, 2023.
Primary county: Kern;
Neighboring counties: Inyo, Kings, Los Angeles, San Bernardino, San Luis Obispo, Santa Barbara, Tulare and Ventura.
“SBA eligibility covers both the economic impacts on businesses dependent on farmers and ranchers that have suffered agricultural production losses caused by the disaster and businesses directly impacted by the disaster,” Sánchez said.
Small nonfarm businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations of any size may qualify for Economic Injury Disaster Loans of up to $2million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred.
“Eligibility for these loans is based on the financial impact of the disaster only and not on any actual property damage. These loans have an interest rate of 4percent for businesses and 2.375 percent for private nonprofit organizations, a maximum term of 30years, and are available to small businesses and most private nonprofits without the financial ability to offset the adverse impact without hardship,” Sánchez said.
Interest does not begin to accrue until 12 months from the date of the initial disaster loan disbursem*nt. SBA disaster loan repayment begins 12 months from the date of the first disbursem*nt.
By law, SBA makes Economic Injury Disaster Loans available when the U.S. Secretary of Agriculture designates an agricultural disaster. The Secretary declared this disaster on Feb. 12.
Businesses primarily engaged in farming or ranching are not eligible for SBA disaster assistance. Agricultural enterprises should contact the Farm Services Agency about the U.S. Department of Agriculture assistance made available by the Secretary’s declaration.
Applicants may apply online and receive additional disaster assistance information at SBA.gov/disaster. Applicants may also call SBA’s Customer Service Center at (800)659‑2955 or email[email protected] for more information on SBA disaster assistance. For people who are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.
The deadline to apply for economic injury is Oct. 15, 2024.
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About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of business ownership. 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, 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 www.sba.gov.
FAQs
The lender will provide you with a full list of eligibility requirements for your loan.
- Be a for-profit business. The business is officially registered and operates legally.
- Do business in the U.S. ...
- Be creditworthy. ...
- Exhaust financing options.
Funds you get from SBA must be repaid over time.
SBA information is also available at www.SBA.gov/disaster or by email at [email protected].
Is it hard to get an SBA disaster loan? ›
If you have bad credit, or your small business credit score isn't stellar, the SBA will still consider other factors, such as recent income and your history of rent, utilities, insurance, and other payments, to determine whether you qualify for an SBA disaster loan.
Is it possible Eidl loans will be forgiven? ›
Understanding EIDL Loan Forgiveness
Unfortunately, there is no current program for complete EIDL loan forgiveness. However, the SBA may consider partial forgiveness or loan modification in extenuating circ*mstances. This typically applies to borrowers who can demonstrate financial hardship.
Who is not eligible for an SBA loan? ›
First and foremost, your business must be for-profit and operate within the United States or its territories. Non-profit organizations are not eligible for SBA loans. Additionally, you must have exhausted all other financing options, including personal assets, before turning to an SBA loan.
What is the easiest SBA loan to get approved for? ›
SBA Express loans provide small businesses and startups like yours with up to $500,000 — and in record time. Entrepreneurs can get approved in as few as two or three days, making them one of the fastest options for funding out there.
What is the interest rate for the SBA disaster loan? ›
Interest rates can be as low as 4 percent for businesses, 3.25 percent for private nonprofit organizations and 2.688 percent for homeowners and renters with terms up to 30 years. Loan amounts and terms are set by SBA and are based on each applicant's financial condition.
Do SBA loans require a down payment? ›
Do SBA loans require a down payment? Yes, the minimum SBA loan down payment requirement is 10% for 7(a) and 504 loans, although this amount can vary based on a business's cash flow and collateral. For example, weak cash flow or low-value collateral can increase the down payment requirement to 30% of the loan amount.
How long does SBA disaster loan approval take? ›
There will be a loan offer made to the borrower within 21 days of a complete loan application.
Why would I get denied for an SBA disaster loan? ›
One common reason for SBA disaster loan denials is incomplete or insufficient documentation, requiring further clarification, or missing necessary forms. The reality is that the SBA small business loan application process is lengthy and meticulous.
In 2023, SBA revised the disaster loan limit for personal property disaster loans to $100,000, and real property loans to $500,000.
What documents do I need for an SBA disaster loan? ›
You will need documentation of the following when you apply for an SBA loan:
- Contact information for all applicants.
- Social Security numbers for all applicants.
- FEMA registration number.
- Deed or lease information.
- Insurance information.
- Financial information.
- Employer Identification Number (EIN)
As a result, business owners will likely face attachment of personal assets, such as bank accounts, vehicle repossession, and even foreclosure to collect the debt. It will also significantly impact their personal credit score as they have given the personal guarantee.
What happens to an SBA disaster loan if the business closes? ›
Loan Repayment: Business closure does not automatically eliminate the obligation to repay the EIDL. Borrowers are still responsible for repaying the loan according to the agreed-upon terms and conditions.
Is EIDL forgivable in bankruptcies? ›
Filing for bankruptcy does not automatically discharge any debt, including an SBA Economic Injury Disaster Loan (EIDL). While bankruptcy can provide debt relief, it doesn't guarantee the immediate discharge of your SBA EIDL loan.
What qualifies as a small business for SBA? ›
SBA assigns a size standard to each NAICS code. Most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million, will qualify as a small business.
Which of the following can an SBA loan not be used for? ›
SBA loan funds must be used for legitimate business purposes. You cannot purchase personal assets or pay off personal debts with the loan proceeds. The SBA guidelines specifically state: “An SBA-guaranteed loan cannot be made solely to an individual.”
How difficult is it to get an SBA loan? ›
Generally, the business owner needs to have a credit score in the 600s, depending on the lender and type of loan. The loan must be used for an approved purpose, such as working capital or equipment purchases. You must have a clean criminal record, and typically, you must not owe money to the federal government.
How do I know if I qualify for an SBA loan? ›
Eligibility requirements
- Be an operating business.
- Operate for profit.
- Be located in the U.S.
- Be small under SBA size requirements.
- Not be a type of ineligible business.
- Not be able to obtain the desired credit on reasonable terms from non-federal, non-state, and non-local government sources.
