From hurricanes to volcanic eruptions, natural disasters have become all too common. If you’ve ever been through one, you know that your home or business can go from thriving to destroyed in a matter of hours. When disaster strikes, SBA disaster loans can help small business owners, nonprofit organizations, homeowners, and renters get back on their feet.
How Do SBA Disaster Loans Work?
Offered by the U.S Small Business Administration, SBA disaster loans are low-interest loans that can be used to repair and replace damaged property.
While small business owners often use SBA disaster loans, you don’t have to own a business to qualify for one. Homeowners and renters are also eligible for SBA disaster loans. You just have to live in a declared disaster area.
Keep in mind that disaster loans are meant to restore a property to its original state before the disaster, so they can’t be used to make improvements to a property. However, you might be eligible for a 20% increase in your loan amount to make improvements that are meant to prevent damage from future natural disasters.
What Are the Types of SBA Disaster Loans?
Several different types of SBA disaster loans exist with different purposes, qualification requirements, and loan amounts. Read on to find out which one is best for you.
Home and Personal Property Loans If your home or other personal property were damaged in a natural disaster, you could apply for a home and personal property loan with the SBA. Homeowners may qualify for loans of up to $200,000 that can be used to replace a primary residence, and both homeowners and renters may qualify for loans of up to $40,000 to replace personal property, which includes items like furniture, clothing, appliances, and cars.
Business Physical Disaster Loans Business owners, nonprofit owners, and owners of rental properties can apply for a business physical disaster loan.Read More »SBA Disaster Loans: What You Need to Know