Quote: I don't know if the government does something like this already.....but besides the insurance money these people will receive.....they should offer very low interest loans to all those in the devastated areas.......
The federal government, through the Small Business Administration and the Federal Emergency Management Agency, provides loans and, less commonly, outright grants when disaster areas are declared. Disaster declarations are official notices recognizing specific geographic areas qualified for federal aid. These disaster declarations are published in the Federal Register and can be found at www.gpoaccess.gov or obtained through the FEMA hotline at 800-462-9029.
The SBA, whose Web site is at www.sbaonline.sba.gov, assists businesses through its Disaster Loan Program.
SBA provides low-interest, unsecured, long-term disaster loans for residences and businesses. Small Business Act, 15 USC §636 (b), (c) and (f). Loan amounts, types of loans, interest rates and payback periods depend on the financial condition of the applicant. SBA loans normally have an interest rate below 5 percent and a five-year term.
The SBA offers businesses two types of disaster loans: the Business Physical Disaster Loan and the Economic Injury Disaster Loan. The former are loans to repair or replace damaged property owned by the business, including real estate, machinery, equipment, inventory and supplies. They also may be used to refinance mortgages on damaged property. A business entity of any size or type -- for-profit, non-profit, sole proprietorship, partnership, corporation, LLC -- can apply for a physical disaster loan. In the case of damaged commercial real estate, either the owner or a tenant may apply, depending on the terms of the lease. More information is available at www.sbaonline.sba.gov/disaster/loans.html or www.fema.gov.
An economic injury disaster loan is available to small businesses or small agricultural or producer cooperatives that, because of disaster loss, cannot obtain credit through commercial sources. A small business is so classified by comparing its recorded sales or number of employees against predetermined standards for its industrial field. According to the Code of Federal Regulations, the threshold economic injury for a loan is that a business is unable to meet its obligations as they mature or to pay its ordinary and necessary operating expenses. Loss of anticipated profits or a drop in sales is not considered substantial economic injury for this purpose. A loan may be used for working capital to assist the applicant resume normal operations. The loan typically carries an interest rate of 4 percent. More information is available at www.sbaonline.sba.gov and at www.drj.com.
An applicant can obtain both types of loans, but the combined loan amount cannot exceed $1.5 million. If, however, a business is a major source of employment within a disaster area, the SBA may waive the $1.5 million limitation.
SBA loan applications can be obtained by calling 800-462-9029. A representative will ask for the following: Social Security number, phone number, address and insurance information. The representative then will activate the application by assigning a registration number and mailing the written portion of the application to the claimant.
