The SBA offers two types of low-interest loans for small businesses damaged during a natural disaster, called economic injury disaster loans and business physical disaster loans.
"They're typically below market (rates). The rate is going to be based on whether you have access to credit somewhere else, and whether it's an economic disaster loan, or an economic injury loan,"
First and foremost, a disaster declaration must be made by
"They've got physical damage, where if your business has physical damage, you can get a loan to repair or replace. And there's an additional loan to prevent that from happening again in future disasters," Lewis said. "(The SBA also offers) economic injury, for if your business shuts down and employees and customers can't get to you and you lose income, you can apply for that."
A business may apply for both if they meet the criteria for both of the loans. Once the declaration is made, business owners have a 60 day window to apply for the physical damage loan and nine months to apply for the economic injury loan.
"They figure people won't see the economic impact immediately, so they give people longer to apply for those types of loans," Lewis said.
The SBA has requirements for what is considered a small business, and Lewis is willing to help business owners determine if they qualify.
"For the physical damage, there is no definition, it's for any building regardless of its size," Lewis said. "For economy injury, you have to meet their size standards. You would have to know the industry they're in to give them an answer, but for most it's going to be 500 employees or less."
He did say, however, that if a business owner collects money from an insurance policy for physical damages, they are unlikely to be awarded the physical damages loan.
The SBDC is offering assistance in getting these loans to any local small business owners that want to apply for them. Lewis can be reached at 912-264-7343.
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