Small Business Financial Emergency – SBA Disaster Loans


SBA disaster loans are available to homeowners, business owners, and tenants needing immediate financial assistance, to recover from unexpected local disasters, like floods, tornadoes, and fires. The U.S. Small Business Administration (SCSA) provides loans to eligible borrowers nationwide in federally declared emergency disaster areas.

In the case of flood damage or a fire outbreak, homeowners and small businesses can apply to receive funds that will cover the costs of repairing or replacing property damaged by water. In the case of a fire, they can request emergency loans to cover the cost of putting out the fire.

Most homeowners who apply for a federal SBA disaster loan do so with the assistance of a non-profit credit counselling agency that is approved by the SCSA. This non-profit agency will contact your lender and negotiate a payment plan based on your particular situation and needs.

The agency then applies to the lender for your approval. Once you have been approved, you will be required to make a down payment on the loan and pay it off using your credit card or other approved means of payment.

In addition to providing cash advance loans to qualified applicants, many private nonprofits offer SBA eidl round 2 loans as well. Since many private nonprofits operate on a tight budget, they may not be able to absorb the costs of high-interest rates associated with government loans.

However, many also have lower income levels than some low-income families and may be willing to accept a higher interest rate to remain operational. Private nonprofits that provide SBA disaster loans also tend to have a wider range of borrowers to apply to compared to government loans.

As most people are aware, the economic downturn has left many business owners either jobless or with reduced hours. Many of these business owners are finding it difficult to maintain existing business lines of credit that they used before the recession and have resorted to using SBA disaster loans for small business financial assistance.

The SBA has specific criteria for determining which applicants qualify for emergency financial assistance. To be considered for a disaster loan, business owners must have experienced and documented financial problems that resulted from natural disasters. Applicants must also prove that they do not have access to needed funds due to the circumstances described above.

If the property or other assets being loaned have increased in value since the borrower’s financial problems began, this can also serve as a valid reason for obtaining emergency loans. Other acceptable explanations for emergency financial assistance include inclement weather, accidents, power outages, and other incidents that have caused personal property damage to the property.

Most lenders will require applicants to provide documentation describing both the property being loaned as well as reasons why the property is being given priority over other assets. This documentation can range from a simple explanation from the owner explaining why they lost their house to documenting the extreme measures taken to repair the house following the incident.

Depending on the lender and the circumstances, small businesses can expect their interest rates to be significantly higher than standard loan rates, but that is generally provided for in the loan agreement. Many lenders are willing to work closely with potential borrowers so that they understand all of the details of the lending process and can better understand which loans may be the best choice for their particular situation. With a little research, almost anyone can find the perfect solution to their personal property loans or other types of emergency financing.