SBA Disaster Loans
There are SBA loans to help you recover your business or get your business through tough times. The U.S. Small Business Administration has loans available to address your needs and get you back to serving your customers.
Physical Disaster Loans
If in a declared disaster area and your business experienced physical damage, you might be eligible for this type of financing. This loan can go toward improvements to the building, inventory, fixtures, equipment, and machinery. This covers losses not addressed by insurance or other sources, and insurance proceeds can be subtracted from the loan amount. You can get up to $2 million for a qualified business.
Economic Injury Disaster Loans (EIDL)
Nonprofit organizations, small agricultural cooperatives, and small businesses in a declared disaster area may qualify for this loan. Significant economic injury is when the business cannot meet its obligations nor its necessary operating expenses, and the business must not be eligible for credit elsewhere. A business can get up to $2 million to meet obligations normally covered if the disaster did not occur. The funds can go toward working capital and the continuation of regular expenses, such as bills, fixed debt payments, utilities, and health care benefits. While an EIDL does not cover physical damage, it can be paired with a physical disaster loan and the combined loans cannot exceed $2 million.
This is not one of your typical SBA loans, but it is used with an EIDL and/or physical disaster loan. You may find to maintain your business you need a little extra to rebuild your business. If you receive one of the disaster loans, you have up to two years after loan approval to ask for an increase, up to 20% of the verified damage, for improvements. These mitigations can go toward earthquake, wildfire, flood, or wind damages.
Military Reservist Loan
If you have a military reservist called to active duty who is one of your essential employees, you can apply for this loan. You can file for this between the time the employee is notified of an expected call-up to one year after the employee is discharged. The SBA determines if your business would suffer from an economic injury greater than what non-government sources can provide. This loan is up to $2 million, though if determined your business is a major source of employment, that cap can be waived.
While you cannot always plan for disasters, SBA loans can help your business survive.