In response to the severe storms and flooding that occurred throughout North Texas in late August, the Small Business Administration (SBA) is offering low-interest federal disaster loans to those affected.
The SBA acted under its own authority to declare a disaster in response to a request the agency received from Gov. Greg Abbott on Sept. 13. As a result, assistance is now available in Tarrant County, along with Collin, Dallas, Denton, Ellis, Kaufman and Rockwall Counties.
“SBA’s mission-driven team stands ready to help Texas’ small businesses and residents impacted by the severe storms and flooding,” said SBA Administrator Isabella Casillas Guzman. “We’re committed to providing federal disaster loans swiftly and efficiently, with a customer-centric approach to help businesses and communities recover and rebuild.”
Beginning Monday, Sept. 19, SBA customer service representatives will be on hand at Disaster Loan Outreach Centers in Dallas (6200 E. Grand Ave.) and Balch Springs (4732 Shepherd Lane.) to answer questions about SBA’s disaster loan program, explain the application process and help individuals complete loan applications. The centers are open from 9 a.m.-6 p.m. and no appointment is necessary.
Ahmad Goree, Lead Economic Development Specialist/Public Information Officer for the DFW district of the SBA, explained that businesses of all sizes and private nonprofit organizations may borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets. SBA can also lend additional funds to businesses and homeowners to help with the cost of improvements to protect, prevent or minimize the same type of disaster damage from occurring in the future.
For small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations of any size, SBA offers Economic Injury Disaster Loans (EIDL) to help meet working capital needs caused by the disaster. Economic injury assistance is available regardless of whether the business suffered any property damage.
Interest rates can be as low as 3.04 percent for businesses, 1.875 percent for private nonprofit organizations and 2.188 percent for homeowners and renters with terms up to 30 years. Loan amounts and terms are set by the SBA and are based on each applicant’s financial condition.
Goree explained the credit arrangements:
- Credit history – applicants must have a credit history acceptable to SBA.
- Repayment – applicants must show the ability to repay all loans.
- Collateral is required for physical loss loans over $25,000 and all EIDL loans over $25,000.
“SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but requires you to pledge what is available,” Goree said.
As for interest rates, Goree said: “By law, the interest rates depend on whether each applicant has credit available elsewhere. An applicant does not have credit available elsewhere when SBA determines the applicant does not have sufficient funds or other resources, or the ability to borrow from non-government sources, to provide for its own disaster recovery. An applicant which SBA determines to have the ability to provide for his or her own recovery is deemed to have credit available elsewhere. Interest rates are fixed for the term of the loan.”
Interest rates applicable for this disaster are:
- Home loans – no credit available elsewhere, 2.188%; credit available elsewhere, 4.375%.
- Business loans – no credit available elsewhere, 3.040%; credit available elsewhere, 6.080%.
- Nonprofit organizations – no credit available elsewhere, 1.875%; credit available elsewhere, 1.875%.
- Economic injury loans – for business and small agricultural, no credit available elsewhere, 3.040%; credit available elsewhere, not available. For nonprofits, no credit available elsewhere, 1.875%; credit available elsewhere, not available.
The law authorizes loan terms up to a maximum of 30 years. However, the law restricts businesses with credit available elsewhere to a maximum seven-year term, Goree noted, adding that SBA sets the installment payment amount and corresponding maturity based upon each borrower’s ability to repay.
Goree said loan limit amounts are $2 million for business and EIDL, subject to certain qualifications and requirements. However, if a business is a major source of employment, SBA has the authority to waive the $2 million statutory limit. SBA regulations limit home loans to $200,000 for repair or replacement of real estate and $40,000 to repair or replace personal property.
Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloanassistance.sba.gov/.
Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information. For people who are deaf, hard of hearing, or have a speech disability, dial 7-1-1 to access telecommunications relay services.