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U.S. Small Business Administration Fact Sheet -- Disaster Loans
SOUTH CAROLINA DECLARATION 14495 & 14496
Incident: Severe Storms & Flooding
occurring: October 1, 2015 & continuing
Application Filing Deadlines:
- Physical Damage: December 4, 2015
- Economic Injury: July 5, 2016
If
you are located in a declared disaster area, you may be eligible for financial
assistance from the U. S. Small Business Administration (SBA).
What Types of Disaster Loans are Available?
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Business
Physical Disaster Loans – Loans to
businesses to repair or replace disaster-damaged property owned by the
business, including real estate, inventories, supplies, machinery and
equipment. Businesses of any size are
eligible. Private, non-profit
organizations such as charities, churches, private universities, etc., are also
eligible.
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Economic Injury
Disaster Loans (EIDL) – Working
capital loans to help small businesses, small agricultural cooperatives, small businesses
engaged in aquaculture, and most private, non-profit organizations of all sizes
meet their ordinary and necessary financial obligations that cannot be met as a
direct result of the disaster. These
loans are intended to assist through the disaster recovery period.
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Home Disaster
Loans – Loans to homeowners or renters
to repair or replace disaster-damaged real estate and personal property,
including automobiles.
What are the Credit Requirements?
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Credit History – Applicants must have a credit history acceptable to
SBA.
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Repayment – Applicants must show the ability to repay all loans.
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Collateral – Collateral is required for physical loss loans over
$25,000 and all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of
collateral, but requires you to pledge what is available.
What are the Interest Rates?
By
law, the interest rates depend on whether each applicant has Credit Available
Elsewhere. An applicant does not have
Credit Available Elsewhere when SBA determines the applicant does not have
sufficient funds or other resources, or the ability to borrow from
non-government sources, to provide for its own disaster recovery. An applicant, which SBA determines to have
the ability to provide for his or her own recovery is deemed to have Credit
Available Elsewhere. Interest rates are fixed
for the term of the loan. The interest
rates applicable for this disaster are:
- Business Loans (No credit available elsewhere): 4.000%
- Business Loans (Credit available elsewhere): 6.000%
- Non-Profit Organization Loans (With OR without credit available elsewhere): 2.625%
- Economic Injury Loans to Businesses and Small Agricultural Cooperatives (No credit available elsewhere): 4.000%
- Economic Injury Loans to Non-Profit Organizations (No credit available elsewhere): 2.625%
- Home Loans (No credit available elsewhere): 1.875%
- Home Loans (Credit available elsewhere): 3.750%
What are Loan Terms?
The
law authorizes loan terms up to a maximum of 30 years. However, the law restricts businesses with
credit available elsewhere to a maximum 7-year term. SBA sets the installment payment amount and
corresponding maturity based upon each borrower’s ability to repay.
What are the Loan Amount Limits?
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Business Loans – The law limits business loans to $2,000,000 for the
repair or replacement of real estate, inventories, machinery, equipment and all
other physical losses. Subject to this
maximum, loan amounts cannot exceed the verified uninsured disaster loss.
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Economic
Injury Disaster Loans (EIDL) – The law
limits EIDLs to $2,000,000 for alleviating economic injury caused by the
disaster. The actual amount of each loan
is limited to the economic injury determined by SBA, less business interruption
insurance and other recoveries up to the administrative lending limit. EIDL assistance is available only to entities
and their owners who cannot provide for their own recovery from non-government
sources, as determined by the U.S. Small Business Administration.
-
Business Loan
Ceiling – The $2,000,000 statutory
limit for business loans applies to the combination of physical, economic
injury, mitigation and refinancing, and applies to all disaster loans to a business
and its affiliates for each disaster. If
a business is a major source of employment, SBA has the authority to waive the $2,000,000
statutory limit.
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Home Loans –
SBA regulations limit home loans to $200,000 for the repair or replacement of
real estate and $40,000 to repair or replace personal property. Subject to these maximums, loan amounts
cannot exceed the verified uninsured disaster loss.
What Restrictions are there on Loan
Eligibility?
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Uninsured
Losses – Only uninsured or otherwise
uncompensated disaster losses are eligible.
Any insurance proceeds which are required to be applied against
outstanding mortgages are not available to fund disaster repairs and do not reduce
loan eligibility. However, any insurance
proceeds voluntarily applied to any outstanding mortgages do reduce loan
eligibility.
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Ineligible
Property – Secondary homes, personal
pleasure boats, airplanes, recreational vehicles and similar property are not
eligible, unless used for business purposes.
Property such as antiques and collections are eligible only to the
extent of their functional value.
Amounts for landscaping, swimming pools, etc., are limited.
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Noncompliance – Applicants who have not complied with the terms of
previous SBA loans may not be eligible.
This includes borrowers who did not maintain flood and/or hazard
insurance on previous SBA loans.
Note: Loan applicants should check
with agencies / organizations administering any grant or other assistance
program under this declaration to determine how an approval of SBA disaster
loan might affect their eligibility.
Is There Help with Funding Mitigation Improvements?
If
your loan application is approved, you may be eligible for additional funds to
cover the cost of improvements that will protect your property against future
damage. Examples of improvements include
retaining walls, seawalls, sump pumps, etc.
Mitigation loan money would be in addition to the amount of the approved
loan, but may not exceed 20 percent of total amount of physical damage to real
property, including leasehold improvements, and personal property as verified
by SBA to a maximum of $200,000 for home loans.
It is not necessary for the description of improvements and cost
estimates to be submitted with the application.
SBA approval of the mitigating measures will be required before any loan
increase.
Is There Help Available for
Refinancing?
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SBA can refinance
all or part of prior mortgages that are evidenced by a recorded lien, when the
applicant (1) does not have credit available elsewhere, (2) has suffered
substantial uncompensated disaster damage (40 percent or more of the value of
the property or 50% or more of the value of the structure), and (3) intends to
repair the damage.
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Businesses –
Business owners may be eligible for the refinancing of existing mortgages or
liens on real estate, machinery and equipment, up to the amount of the loan for
the repair or replacement of real estate, machinery, and equipment.
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Homes – Homeowners
may be eligible for the refinancing of existing liens or mortgages on homes, up
to the amount of the loan for real estate repair or replacement.
What if I Decide to Relocate?
You
may use your SBA disaster loan to relocate.
The amount of the relocation loan depends on whether you relocate
voluntarily or involuntarily. If you are
interested in relocation, an SBA representative can provide you with more
details on your specific situation.
Are There Insurance Requirements for Loans?
To protect each borrower and the Agency, SBA may
require you to obtain and maintain appropriate insurance. By law, borrowers whose damaged or collateral
property is located in a special flood hazard area must purchase and maintain
flood insurance. SBA requires that flood insurance coverage be the lesser of 1)
the total of the disaster loan, 2) the insurable value of the property, or 3)
the maximum insurance available
For
more information, contact SBA’s Disaster Assistance Customer Service Center by
calling (800) 659‑2955, emailing disastercustomerservice@sba.gov, or visiting SBA’s Web site at http://www.sba.gov/disaster. Deaf and
hard-of-hearing individuals may call (800) 877‑8339. Applicants
may also apply online using the Electronic Loan Application (ELA) via SBA’s
secure Web site at https://disasterloan.sba.gov/ela.
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