SBA encourages businesses, nonprofits to apply for disaster loans

Federal officials are encouraging local business owners and nonprofits to apply for economic injury loans following severe storms this spring.

U.S. Small Business Administration is encouraging businesses and nonprofits that were affected by the March 31 to April 1 storms and tornadoes in Adams, Allen, Bartholomew, Benton, Blackford, Boone, Carroll, Cass, Clay, Clinton, De Kalb, Delaware, Grant, Greene, Hamilton, Hendricks, Howard, Huntington, Jackson, Jasper, Johnson, Knox, Lake, Lawrence, Madison, Marion, Miami, Monroe, Montgomery, Morgan, Newton, Noble, Owen, Porter, Pulaski, Putnam, Shelby, Sullivan, Tippecanoe, Tipton, Vigo, Wabash, Warren, Wells, White and Whitley counties to apply for disaster loans.

As of June 30, nearly $13.5 million dollars in federal disaster assistance have been approved for homeowners, renters, and businesses that were affected. The assistance includes both Federal Emergency Management Agency grants and low-interest disaster loans from the U.S. Small Business Administration.

More than $11.39 million is from SBA disaster loans to individuals, renters and businesses, while more than $2.1 million is from the FEMA Individuals and Households Program, according to a FEMA news release.

While the deadline to apply for physical damage loans has passed, the deadline for Economic Injury Disaster Loans has not. Businesses and nonprofits have until Jan. 15, 2024 to apply for these loans.

“We encourage everybody to make an application for any of our programs,” said Anita Steenson, a SBA spokesperson.

Economic Injury Disaster Loans are working capital loans designed to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private, nonprofit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of a disaster, according to the SBA.

These loans are intended to assist through the entire disaster recovery period, and businesses could receive up to $2 million. For those with no credit available elsewhere, interest rates are 4% for businesses and small agricultural cooperatives and 2.375% for nonprofit organizations, with terms of up to 30 years.

The types of damages that would result in a business applying for an Economic Injury Disaster Loan tend to be difficult for business owners to ascertain, as the damages may not have manifested yet, Steenson said.

“It takes the form of almost like a trickle-down effect,” she said. “… For example, economic injury may take the form of an event that got canceled as a result of the tornadoes. That’s sort of a direct economic injury.”

Consumers may also shift their spending elsewhere as a result of the storms. For example, instead of going out to shop at the mall, they may spend money to take care of an unfixed roof issue or stock up on emergency funds, she said.

There is also another deadline approaching, this time for private nonprofit organizations that provide non-critical services of a governmental nature. These organizations have until July 31 to submit disaster loan applications for physical damages that occurred from the severe storms, straight-line winds and tornadoes from March 31 to April 1.

Eligible organizations include food pantries, homeless shelters, museums, libraries, community centers, schools and colleges. Organizations in Benton, Brown, Clinton, Johnson, Monroe, Morgan, Owen, Sullivan and White counties are eligible to apply, according to a SBA news release.

Nonprofits may borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets. The interest rate is 2.375 %, with terms up to 30 years.

Applicants may be eligible for a loan amount increase of up to 20% of their physical damages, as verified by the SBA, for mitigation purposes. Eligible mitigation improvements may include a safe room or storm shelter, sump pump or French drain to help protect property and occupants from future damage caused by a similar disaster, according to the SBA.

Economic Injury Disaster Loans are also available for these organizations to help meet working capital needs, such as ongoing operating expenses. This assistance is available regardless of whether the organization suffered any physical property damage, officials say.

These organizations are asked to contact their local emergency manager to provide information about their organization. The information will be submitted to FEMA to determine eligibility for a Public Assistance grant or whether they should be referred to SBA for disaster loan assistance, according to the SBA.

For these economic injury loans, which were issued under a separate SBA declaration, the deadline to apply is March 1, 2024.

Steenson encourages everyone to apply as it is free and simple to do and there is no downside to applying.

“It’s not a like huge, massive undertaking. Again, there’s no downside,” she said.

APPLYING FOR DISASTER LOANS

Here’s a look at how to apply for disaster loans from the U.S. Small Business Administration:

Deadlines

Businesses, small agricultural cooperatives and nonprofit organizations [Disaster Declaration #17881 & #17882]: Economic Injury Disaster Loans — Jan. 15, 2024

Private non-profit organizations (non-critical governmental services) [Disaster Declaration #17955]: Physical damages — July 31, 2023; Economic Injury Disaster Loans — March 1, 2024

Applying

Applicants can apply online using the Electronic Loan Application (ELA) via SBA’s secure website at disasterloanassistance.sba.gov/ela/s/:

• Businesses, small agricultural cooperatives and nonprofit organizations should apply under SBA declaration #17881 or #17882.
• Private non-profit organizations (non-critical governmental services) should apply under SBA declaration #17955.

Disaster loan information and application forms can also be obtained by calling the SBA’s Customer Service Center at 800-659-2955 or by sending an email to [email protected]. Loan applications can be downloaded from the SBA’s website at sba.gov/disaster.

Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.