Suppose your small business has been impacted by an economic injury disaster or a crisis, such as the COVID-19 outbreak. In that case, it may be eligible for SBA disaster loan assistance to recover from damages that insurance does not cover.
Here’s everything you need to know on how to apply for an SBA loan, periods to expect.
Tips to Apply for a Small Business Administration Disaster Loan
PPP loan applications are accessible through SBA-approved lenders, including numerous banks and certain fintech businesses.
The following steps are included in the application procedure for different types of loans:
Apply for a loan
The SBA accepts online applications for all catastrophe loans (the quickest route). Still, you can also submit a paper application by mail or in person at one of the SBA’s disaster loan assistance or recovery centers. The SBA anticipates making judgments on applications within two to three weeks.
Get an estimate
To evaluate your damages, the SBA examines your credit history and inspects your company property. Based on the inspection and any predicted insurance payments, a loan officer will assess your eligibility and estimate the size of your loan.
Decision on loan processing
Provide the loan officer with copies of papers such as recent income tax returns and a personal financial statement, which will be used to demonstrate your ability to make loan payments.
Obtain funds
If you are accepted, the SBA will issue the first payout — up to $25,000 for physical and economic damage loans — within five days of signing and returning the closing documentation.
Consult with a case manager
A case manager will help you meet the loan’s terms and establish a distribution plan. If your financial situation changes or you receive an unexpected inflow of insurance funds, the agency may amend your loan.
Additional Documents Required
When you apply for an SBA loan, the information you supply to the SBA is determined by the type of loan you request.
Applicants for home loans must get a Registration ID Number from the Federal Emergency Management Agency (FEMA). Applicants must supply the SBA with the following information:
- Contact and personal information
- Salary and employment information
- For damaged property, including the address and insurance details.
- Cash, retirement savings, and automobiles are examples of current assets.
- Mortgages, credit card debt, and installment loans are examples of existing indebtedness.
- Other sources of income include child support, alimony, and tuition.
- Data on delinquencies, judgments, litigation, or criminal records
During the application process, business owners must supply the following information:
- Address for business
- Identification number for the employer
- Organizational structure (corporation, partnership, etc.)
- Information about commercial insurance (if your policy covers the disaster)
- Business owners’ personal and contact information
- Statements of personal finances
- Liabilities and debts schedule
- Most recent corporate tax returns
The SBA may need extra information from business owners, such as current profit and loss accounts, monthly sales data, or balance sheets. If the SBA demands these records, you must submit them within seven days.
