SBA increases financial support for disaster survivors
Published 10:30 am Thursday, September 7, 2023
The U.S. Small Business Administration (SBA) announced it has finalized a rule to increase support to disaster survivors and small businesses needing relief following a federally declared disaster.
The rule becomes effective for all disasters declared on or after July 31, 2023.
“The Biden-Harris Administration has prioritized maximizing resources for disaster survivors so that they can successfully recover and build resilience to the effects of climate change that have led to more frequent and costly natural disasters,” said SBA Administrator Isabella Casillas Guzman. “The SBA’s disaster loan program rule modifications will ensure more flexible and affordable disaster loans are available for small businesses, nonprofits, renters, and homeowners that will allow them to focus on recovering quickly so their communities can survive and thrive again.”
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Some of the key changes include:
—Increased Loan Limits for Primary Residence: $200,000 to $500,000 for real estate repair or replacement, contractor malfeasance, refinancing, and mitigation for home disaster loans.
—Increased Loan Limits for Personal Property: $40,000 to $100,000 for replacement of clothing, furniture, appliances, automobiles, and more for home disaster loans.
—Remove Administrative Limit on Landscaping: Landscaping will be limited to the overall real estate repair limit and not capped at $5,000.
—Increase the Initial Payment Deferral Period: Extending the first payment deferment period from 5 to 12 months for all disaster loans.
—No Interest Accrual for the First 12 Months: Waives interest accrual for the first year from the date of the initial disbursement for all disaster loans.
—Mitigation Disaster Loans: Eliminates a restriction on property owners to only use disaster loan funds to mitigate a “similar” disaster event that caused damage to their home or business.
The SBA is also expanding its mitigation assistance to other types of hazards beyond the declared disaster event. Communities are often under threat from multiple types of hazards, including hurricanes, floods, tornadoes, wildfires, earthquakes, and more. Today’s announcement will ensure that property owners can use their disaster loan funds to rebuild stronger and more resilient against multiple types of hazards and not just against a single threat.
To learn more, visit www.sba.gov.