Richard Daigle, public affairs specialist for the SBA, explained the first step in applying for an SBA loan is to register with the Federal Emergency Management Agency, which can be done online at www.disasterassistance.gov or by calling 1-800-621-3362.
"[The Small Business Administration] can loan up to $200,000 for a homeowner to repair their real estate and build their house back, and on top of that, up to another $40,000 for content loss, which would be their appliances, their furniture and their automobiles," Daigle said. "To the renter who doesn't own their house, we can give them a loan of up to $40,000 for the loss of personal contents.
He said what makes the SBA loans unique is that they cover losses that might otherwise not be covered by insurance.
"For businesses it's up to $2 million, and the interesting thing about the business loan is that the $2 million is not just for physical damages, but also for what we call 'Economic Injury," Daigle said. "A business may not have suffered any physical damage from the tornado, but maybe their customer base is pretty much gone or maybe the supplier that provided their product had damage."
The interest rate for home loans start at 2.688 percent, business loans begin at 4 percent and nonprofit organization loans begin at 3 percent.
"Anytime FEMA is involved in a Disaster Declaration the SBA is as well," Daigle said. "Our name is Small Business Administration, but I think that can throw people off sometimes because they see [the name] and think we just help businesses when the truth is we help businesses but also homeowners and renters. In fact, we are the primary means of recovery from the federal government, and the reason I would say that is because this is where [people] can get the most amount of money to build back their property and repair their real estate and personal contents -- meaning the things they lost in the disaster"
Daigle said it was important for people to know although they may be approved for a loan, that doesn't mean they have to accept the loan.
"We're not imposing anything on them, what we're doing is giving them a very important option," Daigle said. "Sometimes people feel like they don't need the loan, but then later on they realize that they can't get their money from any other source, and then they realize that SBA Disaster Loan was exactly what they needed. If they apply for the loan and they're approved, then they've got a resource they can call on for help. If they're not approved for the loan, they're actually referred back to FEMA where they can be eligible for additional grant money. So, for the people who are not approved, they may wind up getting grant money they may have not received otherwise."
The application filing deadline for Physical Damage is June 28 and the deadline for Economic Injury is Jan. 30, 2012. Daigle said applicants should hear a response from the SBA within about 10 days.