CHRISTIANSTED — Some 40 percent of small businesses never reopen after a disaster, according to the Federal Emergency Management Agency (FEMA)
To help small businesses, loans are available from the U.S. Small Business Administration (SBA).
The SBA also can lend money to homeowners and renters hurt by disasters such as Hurricanes Irma and Maria.
If you are turned down for a FEMA grant, you might still automatically qualify for disaster assistance in the form of a loan.
Virgin Islands residents, businesses and non-profits that sustained damage during the hurricanes are urged to apply to FEMA first, which could qualify you for a low-cost, long-term loan from the SBA.
“SBA offers low-interest, long-term disaster loans to repair or replace property damaged by the hurricane that is not covered by insurance,” said Laurie Dana, an SBA public affairs specialist. “Homeowners can borrow up to $200,000 to repair damages to their primary residences. Homeowners and renters can borrow up to $40,000 to repair/replace personal property such as the contents of homes or automobiles. These loans are as low as 1.75% with terms up to 30 years. SBA cannot duplicate benefits provided by insurance.”
Dana said that “SBA encourages people not to wait for their insurance to settle to apply for a disaster loan.” Interest rates are as low as 3.305 percent are in place for businesses and 2.5 percent for private nonprofit organizations.
“The reason if insurance settles after the deadline and doesn’t cover all the damages, it will be too late for a person,” she said. “The deadline to register with FEMA and apply for a disaster loan is December 13. A person does not have to accept a loan if approved, but they have that option after the deadline if they decide they need the funds to recover. If a homeowner or resident is denied a loan they are referred back to FEMA for any other grant assistance that may be available.
Businesses and non-profits can borrow up to $2 million to recover from hurricane damage to buildings, equipment, inventory and other assets.
They may also borrow working capital to help pay the bills they would have been able to pay had the disaster not struck. Landlords may apply as businesses for their rental properties.
