Small Business Administration Disaster Loan Program

Small Business Administration Disaster Loan Program :

      What is Small Business Administration Disaster Loan Program ? SBA home repair disaster loans can be explained as financial assistance provided by the United States Small Business Administration (SBA) for the purpose of supporting people in getting their damaged property repaired or rebuilt. These are low interest loans that have been introduced with the objective of helping people who have been affected by natural calamities, so that they can recover with the least possible damage. These loans can be availed by businesses and homeowners to replace their uninsured or underinsured flood damaged property. These loans are provided for a fixed term of 30 years at 3 percent interest rate. However, the loan amount approved under a disaster loan includes the total cost incurred on repairing or rebuilding after deducting the insurance amount.

       As a part of its revised strategy, SBA is now trying to construct homes that are safer and stronger.  For this purpose, it has now included mitigation funds as a part of disaster loans that are being provided to customers. Utilizing these funds, disaster loan recipients can now undertake mitigation measures in their homes making them more damage resistant to withstand any further natural calamities such as floods and storms. Some of these mitigation measures for which the mitigation funds are provided by SBA can be utilized include bracing, using foundation bolts and reinforcements and building a safe room that can withstand the blowing winds during a tornado or a hurricane.

       These mitigation funds are only available for applicants who have become eligible for disaster loans. Under this, the borrowers can avail an additional 20 percent on the approved loan amount. While applying for mitigation funds, it is always mandatory to describe the details of the damage and the type of mitigating measures that are needed to be adopted including the estimated costs of these measures. Information about these measures is available online on the website of Federal Emergency Management agency (FEMA), which is operated under United States Department of Homeland Security.

       In order to be eligible for a SBA home repair disaster loan, the applicant must register with FEMA. Upon receipt of loan applications, applicant must approach the SBA loan officer. Assistance offered through these loans covers damage to personal property, vehicle repair or replacement, and also covers the expenses required for relocation and storage.