Small Business Administration Disaster Relief Loans


The Small Business Administration (SBA) provides low-interest (generally 4 percent or less), long-term (up to 30 years) loans to help homeowners, renters and non-farm businesses recover from a disaster. Loan proceeds may be used to repair or replace disaster damaged property that is not fully covered by insurance.

Homeowners may apply for up to $200,000 to repair or replace their primary home to its pre-disaster condition, including required city or county building codes that require structural improvements. The loan may not be used to upgrade the home or make additions to the home. Also, loans may be increased by as much as 20 percent for mitigating devices to protect the real property from possible future disasters of the same kind.

Homeowners and renters may apply for up to $40,000 to repair or replace damaged or destroyed personal property, such as clothing, furniture and automobiles. The loan proceeds cannot be used to replace extraordinarily expensive or irreplaceable items, such as antiques, collections, pleasure boats or recreational vehicles.

Businesses of all sizes and private, non-profit organizations may apply for up to $1.5 million to repair or replace damaged real and personal property, such as machinery, equipment, inventory, furniture and fixtures. The loan may not be used for upgrades or additions, but may be increased up to 20 percent (within the $1.5 million limit) for mitigating devices to protect against future disasters of the same kind.

Small businesses and small agricultural cooperatives that do not have credit available from non-government sources may apply for Economic Injury Disaster Loans up to $1.5 million to provide working capital to meet obligations until normal operations resume. The total loan amount to any one business entity (including affiliates) for a combined Physical and Economic Injury Disaster Loan may not exceed $1.5 million.

In some cases, when there is substantial damage, SBA may refinance existing mortgages on homes and business property to make the loan affordable.

Updated: February 16, 1999