In the absence of insurance coverage, the U.S. Small Business Administration (SBA) Disaster Loan Program may offer low-interest disaster loans to businesses of all sizes, private non-profit organizations,homeowners, and renters. SBA disaster loans can be used to repair or replace the following items damaged or destroyed in a declared disaster: real estate, personal property, machinery and equipment, and inventory and business assets. SBA loans are based on the borrower’s credit worthiness and repayment ability, and repayment terms can be up to 30 years. SBA loans are available with a federal major disaster declaration or with a SBA agency disaster declaration.

SBA Loans with a Federal Major Disaster Declaration

When the President makes a federal major disaster declaration, the SBA automatically makes its low-interest loan programs available to qualifying businesses and private non-profit organizations that have suffered damages. Businesses may request an application for a low-interest loan by phone. All individual applicants who have applied for the Individual Assistance Program, unless low income, will receive an SBA application package. Additionally, SBA personnel are available at Disaster Recovery Centers (DRCs) to provide one-on-one assistance.

Individuals can also apply for SBA disaster loans as part of the FEMA Individual Assistance: Individuals and Households disaster assistance application process. All individuals automatically receive an SBA application package when they apply for the Individual Assistance Program.

SBA Loans Without a Federal Major Disaster Declaration

For smaller emergencies or disasters (such as fires, localized flooding, or other events) that do not qualify for a federal Major Disaster Declaration, MEMA and the SBA will evaluate damages with local emergency managers. MEMA works with the SBA to determine whether thresholds have been surpassed to qualify for an SBA administrative or agency disaster declaration which would provide low-interest loans to businesses, private non-profit organizations, homeowners, and renters to help them with disaster recovery. 

If an administrative agency disaster declaration is declared by the SBA, a Disaster Loan Outreach Center (DLOC) may be established near so that the affected area applicants can sit with the SBA officials for assistance with the loan process.

Physical Disaster Loans

Criteria

At least 25 homes or 25 businesses (or a combination) have uninsured losses of 40 percent or more of the estimated fair replacement value or pre-disaster fair market value of the damaged property, whichever is lower. 

Physical Disaster Loans

Physical Disaster Loans are a primary source of funding for permanent rebuilding and replacement of uninsured disaster damages to privately-owned real and/or personal property. These loans are available to qualifying homeowners, renters, non-farm businesses of all sizes, and non-profit organizations. Loans for personal property damage cover clothing, furniture, and automobiles, and are limited to $40,000. Real property loans are for repairing or restoring a home to its pre-disaster condition or to prevent future disaster damages, and are limited to $200,000. 

Business Physical Disaster Loans 

Business Physical Disaster Loans are a source of funding to repair or replace destroyed or damaged business facilities, inventory, machinery, equipment, and other assets not fully covered by insurance. They are limited to $2 million. Loans also are available to provide working capital during the disaster recovery period to small businesses in declared counties.

Economic Injury Disaster Loans

Criteria

For economic injury disaster loans, at least five businesses within a county have suffered substantial economic injury (40 percent or more uninsured losses in revenue each, as compared with the same time the previous year), and there is no reasonable financial assistance available in the area.

Economic Injury Disaster Loans

Economic Injury Disaster Loans provide businesses with necessary working capital until normal operations resume after a disaster. These loans are for small businesses and small agricultural cooperatives that are unable to obtain credit elsewhere, and are limited to $2 million. In major disasters, businesses in bordering counties may be eligible for loans as well.

Active Disaster and How to Apply

There are currently two open SBA disasters in Massachusetts. Click on the links below to access the SBA fact sheets for these disasters.

Disaster Loans: Record Breaking Snowfall and Extreme Cold Temperatures (January 26, 2015 – February 22, 2015).
Economic Injury Disaster Application Filing Deadline: February 15, 2016


Disaster Loans: Brookside Condominium Complex Fire, Arlington, MA
Physical Damage Application Filing Deadline: CLOSED
Economic Injury Application Filing Deadline: March 11, 2016


For additional information on applying for these loans, contact SBA’s Disaster Assistance Center by calling (800) 659-2955, emailing disastercustomerservice@sba.gov, or visiting SBA’s website at www.sba.gov/disaster.

To learn more about SBA disaster loans, including historical disaster declarations, visit the Small Business Administration Disaster Loans website.

For questions or additional information, contact MEMA's Recovery Unit Staff.