SBA’s Disaster Assistance Program Disaster damaged business Reconstructed business using SBA funds Helping Survivors Recover From Disasters A Presentation for the Florida Housing Coalition May 17, 2019
Agenda About SBA’s Disaster Assistance Program Statistics for FL Hurricanes Irma and Michael Types of SBA Disaster Declarations Types of SBA Disaster Loans Why Apply for an SBA Disaster Loan? Three Step Process Myths Versus Fact 2
About SBA’s Disaster Assistance Program ODA Mission Statement To provide low interest disaster loans to businesses of all sizes, private nonprofit organizations, homeowners and renters to repair or replace real estate, personal property, machinery & equipment, inventory and business assets that have been damaged or destroyed in a declared disaster. 3
SBA’s History in Making Disaster Loans The SBA’s low -interest loan program was designed by Congress to help those affected by unforeseen catastrophic events to recover with as little adverse impact as possible. SBA has been making disaster loans since 1953, and has approved more than $63.9 billion in disaster loans to more than 2.1 million businesses, homeowners, and renters. In fiscal year 2018, SBA approved 140,240 loans for over $6.9 billion in disaster loans for businesses and residents nationwide . For fiscal year 2019 thru April, SBA has approved 37,217 loans for over $1.9 billion. 4
Statistics for FL Hurricanes Irma and Michael As of the close of business on May 9, 2019 Florida Hurricane Irma Type of Loans Number of Loans Dollar Amount Homes 32,956 $1,116,719,400 Businesses 4,379 $331,924,400 Total 37,335 $1,448,643,800 Florida Hurricane Michael Type of Loans Number of Loans Dollar Amount Homes 11,373 $516,295,300 Businesses 1,220 $120,964,500 Total 12,593 $637,259,800 5
Types of SBA Disaster Declarations AP Photo/US Coast Guard 6 6
Types of Disaster Declarations • Presidential (Individual / Public Assistance) • Administrative (Agency)* • Governor’s Certification* • Secretary of Agriculture* • Military Reservist* *(Register and apply directly with SBA). 7
A Disaster Occurs, What’s Next?
Initial Process for Presidential Declarations for Individual Assistance and SBA Administrative Declarations The Governor contacts FEMA and/or SBA to request a preliminary damage assessment (PDA) or disaster damage survey. SBA and/or FEMA assesses the damage and reviews the result of disaster damage survey with the State. Based on results Governor may request a presidential or SBA declaration. The request for a disaster declaration is either approved or denied. 9
Presidential Declaration for Individual Assistance (I/A) • If the President declares a major disaster declaration for Individual Assistance, SBA’s disaster loan program is automatically activated. • Businesses of all sizes including private, nonprofit organizations, homeowners and renters are eligible to apply for their uncompensated physical losses. President Donald J. Trump • Small businesses, small cooperatives, small aquaculture businesses and most private nonprofits of any size, can apply for working capital loans to cover their economic injury losses. 10
Presidential Declaration for Public Assistance (PA) If the President declares a major disaster declaration for Public Assistance, SBA’s disaster loan program is activated only for eligible private, nonprofit organizations for physical damage and economic injury. Nonprofit Organizations Religious Organizations Community Centers 11
Hurricane Michael - Panama City, FL 12
Administrative (Agency) Declarations When the PDA indicates damages are insufficient for a Presidential declaration, the Governor can request an Administrative (Agency) declaration through the SBA Administrator. Administrative (Agency) Declarations require: At least 25 homes and/or businesses in a county with uninsured losses of 40% or more of their estimated fair market value. Acting SBA Administrator Chris Pilkerton 13
Differences in Presidential Versus Agency Declarations The declared disaster area and eligibility is different. SBA Administrative declaration Presidential declaration (IA) Indicates that SBA Disaster Loans for Indicates that SBA Disaster Loans for physical physical and economic injury losses are and economic injury losses available in both the “Primary” County are available in the “Primary” County. and “Contiguous” Counties. Indicates that only SBA Disaster Loans for economic injury are available in “Contiguous” Counties. 14
Governor’s Certification If a Governor certifies that at least five (5) small businesses in a disaster area have suffered substantial economic injury as a result of the disaster, and need financial assistance not available on reasonable terms, SBA activates its Economic Injury Disaster Loan (EIDL) program only. These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits. Note: Physical Disaster Loans are not available in this type of declaration. The filing deadline is 9 months from the date of the declaration. CBS News 15
Secretary of Agriculture Declarations If the Secretary of Agriculture designates an area an agricultural disaster, SBA automatically activates its Economic Injury Disaster Loan (EIDL) program. Loans are made available to eligible small businesses, small cooperatives, small aquaculture businesses and most private non-profits of any size that have suffered substantial economic Farmers and injury as a result of the declared disaster. ranchers are not eligible. These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been However, both paid had the disaster not occurred. The loans are not intended farm-related and to replace lost sales or profits. non-farm related small businesses This declaration is for Economic Injury Disaster Loans (EIDLs) are eligible to only. The filing deadline is 8 months from the date of the apply. declaration. 17
Types of SBA Disaster Loans 1) Physical Home 2) Physical Business 3) Economic Injury 18 18
SBA Disaster Loan Limits Types of Loans Borrowers Purpose Max. Amount Business Loans “Physical” Businesses and Repair or replace real $2 million * private nonprofits estate, equipment, furniture, etc. Economic Injury Loans Small businesses and Economic injury $2 million * private nonprofits disaster loans or working capital loans Home Loans Homeowners Repair or replace real $200,000 property Home Loans Homeowners and Repair or replace $40,000 renters personal property Mitigation Businesses, private Mitigate / prevent 20% of verified nonprofits and future loss to real physical damage. homeowners property Homeowners is limited to $200,000 *The maximum business loan is $2 million, unless the business qualifies as a Major 19 Source of Employment (MSE).
Requirements for Loan Approvals Eligibility • Damaged property/business must be in a declared county. Credit History • Applicants must have a credit history acceptable to SBA. Repayment • Applicants must show the ability to repay the SBA loan. 20
Hurricane Michael - Panama City, FL 21
Collateral Requirements • Physical loans over $25,000 require collateral. • Economic injury loans over $25,000 require collateral. (Up to $50,000 unsecured disaster business loans-combined physical and economic injury loan funds). • SBA will not decline a loan for lack of collateral, but requires collateral if it’s available. 22 22
Why Apply for an SBA Disaster Loan? Low interest rates May apply for mitigation funds to protect against future events Cash flow lender First payment deferred No equity required Don’t need damage estimate to apply Flexible terms-up to 30 years Federal/State assistance may stop No prepayment penalty Loan can be modified Funds are available prior to an insurance settlement No obligation to take the loan if No closing costs approved May be eligible for referral to May be eligible for refinancing or grant program relocation When disaster survivors need to borrow to repair uninsured damages, the low- interest rates and long-terms available from SBA make recovery affordable. 23
Hurricane Michael Response 24
Hurricane Michael - Panama City, FL 25
FEMA Referrals to SBA • After registering with FEMA for assistance, survivors may be referred to the U.S. Small Business Administration (SBA). Homeowners and renters should submit an SBA disaster home loan application, even if they think they will not qualify. • If SBA cannot approve the loan request, survivors may be referred back to FEMA and considered for grants and programs that could include assistance for disaster-related car repairs, clothing and household items. • SBA loans cover disaster losses that are not covered by insurance or recoveries from other sources. It is not necessary to wait for your insurance settlement before applying with SBA.
Recommend
More recommend
