The Small Business Administration is issuing millions in emergency loans to small businesses impacted by Hurricane Harvey. What are the restrictions and how do you apply for this type of commercial loan?

The SBA is approving loans at an unprecedented rate in the aftermath of Hurricane Harvey. As part of the recent aid package passed by Congress, the SBA has received 450 million dollars to distribute as loans to those impacted by the storm. As of September 10^th, the agency has approved 100 million dollars in loans. 8.5 million of those dollars are directed to small businesses. An SBA disaster loan may be the best option to cover uninsured damage in the aftermath of Hurricane Harvey. Learn the restrictions of an SBA disaster loan and how to apply for one.

The SBA only approves emergency loans in areas considered directly impacted by a natural disaster. Ensure that your community is listed on the SBA website. These loans are issued directly by the SBA, so the fastest way to get approved is to apply directly on the website. Be expected to provide documentation including legal records relating to your business, detailed documentation of specific damages, tax records, profit and loss statements and lists of your current assets. The SBA may request further documentation throughout the process. After submitting the necessary documents, the agency will review your insurance coverage and determine whether you qualify for a disaster loan. In general the approval process takes 2 to 3 weeks. The SBA will may review both your personal and business credit scores. You may be required to offer principle in your business in order to guarantee the loan.

SBA disaster loans are meant to cover uninsured damages related to natural disasters including economic and physical damage. How the proceeds of the loan can be applied depends on the type of loan you apply for. The SBA issues both Physical Disaster Loans and Economic Injury Disaster Loans. Physical Disaster Loans can be applied to repairing or replacing real-estate, machinery, equipment, fixtures, inventory or to make leasehold improvements. SBA disaster loans are intended specifically for uninsured damages. However, if your property is covered by insurance an SBA loan may be applied to cover your mortgage obligations. Economic Injury Disaster Loans (EIDL) are intended as a stop gap for interruptions in cash-flow. An EIDL is meant to help businesses meet normal financial obligations which they no longer able to meet due to a disaster.

SBA disaster loans cannot exceed two million dollars. You may need to seek other types of commercial loans to repair damage to your property

The SBA can only give small businesses two million dollars in the form of disaster loans. This amount may not fully cover the damage to your business. If you suspect your damages exceed 2 million dollars, seek out additional options to help you recover.

Remember an SBA Disaster Loan is still a commercial loan.

An SBA disaster loan is an excellent option to rebuild and repair your business. But it is a loan, not a hand out. The agency considers your credit score prior to approving any disaster loan. If you suffer from poor credit, you may be denied. Another factor to consider is that you may not have the documentation needed by the SBA. You may have lost your business records as a result of the disaster. Consider whether you have a good credit profile and the necessary documentation before applying for an SBA disaster loan.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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