Nerdy takeaways
- Small-business owners affected by a declared disaster may qualify for funding to pay for property damages or operating expenses they can no longer afford.
- SBA disaster loans offer low interest rates and repayment terms up to 30 years. Plus, there are no prepayment penalties or fees.
- No payments or interest due for the first 12 months.
- Apply for funding directly through the U.S. Small Business Administration’s website.
SBA disaster loans provide financing to help small businesses recover from physical and economic damage caused by a declared disaster. These loans offer low interest rates, long repayment terms and may fund faster than other types of SBA loans.
If a major disaster leaves you with losses that insurance won’t fully cover, an SBA disaster loan is a great option for financing.
How much do you need?
We'll start with a brief questionnaire to better understand the unique needs of your business. Once we uncover your personalized matches, our team will consult you on the process moving forward.
What is an SBA disaster loan?
SBA disaster loans are small-business loans issued by the U.S. Small Business Administration to help cover costs after a declared disaster, such as a hurricane, wildfire, earthquake or flood.
Who can apply?
These loans are available to:
- Businesses (of any size).
- Private nonprofit organizations.
- Homeowners.
- Renters.
How SBA disaster loans help small-business owners
Small-business owners can use SBA disaster loans to:
- Repair or replace damaged or destroyed property not covered by insurance or funding from FEMA.
- Pay for operating expenses they can no longer afford due to the disaster (or when an essential employee is called to active military duty).
- Help prevent physical property damage from future disasters.
Types of SBA disaster loans
There are four different types of SBA disaster loans:
Type of SBA disaster loan | Purpose | Who can apply |
|---|---|---|
Business physical disaster loans* | Repair or replace business property, machinery, equipment, fixtures and inventory. Rental property owners can also use these loans to make repairs or replace damaged items within their buildings. | Owners of:
|
Economic injury disaster loans (EIDL)* | Working capital for small businesses that can’t pay their typical operating expenses as the result of a disaster. | Owners of:
|
Military reservists economic injury disaster loans (MREIDL) | Helps business owners pay everyday expenses they can no longer afford because an essential employee has been called to active military duty. | Owners of:
|
Home and personal property loans | Replace or repair (but not upgrade) a primary residence. Renters and homeowners can also apply for financing to repair or replace personal property, such as clothing, furniture, cars and appliances. |
Note: You don’t have to be a business owner to apply. |
*Business owners can apply for both a business physical disaster loan and an EIDL for a single declared disaster, up to $2 million. | ||
SBA disaster loan amounts, terms and rates
The loan amounts, terms and rates you receive will vary based on your individual needs and circumstances, but here’s what you can expect:
Type of SBA disaster loan | Maximum loan amount | Repayment term | Interest rates |
|---|---|---|---|
Business physical disaster loan | Up to $2 million (or more if your business is a major source of employment). |
|
|
Economic injury disaster loan (EIDL) | Up to $2 million. | Up to 30 years. | Up to 4%. |
Military reservists economic injury disaster loan (MREIDL) | Up to $2 million. | Up to 30 years. | Up to 4%. |
Home and personal property loan |
| Up to 30 years. | Up to 4% if you can’t access other financing. |
» MORE: Current SBA loan rates
You won’t owe payments or interest for the first 12 months
One of the biggest benefits of an SBA disaster loan is that you can defer both payments and interest for up to the first 12 months.
This is a rare and powerful benefit for business owners trying to pick up the pieces after a major disaster. It gives you time to make repairs, reopen your business and rebuild cash flow before the pressure of monthly payments begins.
If you’re able to start repaying the loan sooner, you can. The SBA doesn’t charge prepayment penalties for disaster loans, so you can pay down your balance early without an added fee.
Mitigation assistance may help you qualify for more money
While your loan amount depends on your losses above what insurance and other funding sources can cover, you may be able to increase your physical disaster loan by up to 20% of your verified loss.
The SBA calls this “mitigation assistance.” You can use it to fund improvements that protect your business or home from future disasters. For example, you can upgrade your windows to protect against high winds or add a sump pump to reduce the risk of flooding.
SBA disaster loan requirements
To qualify for a disaster loan, you’ll need to meet a set of SBA loan requirements. These largely vary based on your situation and the type of financing you’re looking to get. Here are some general criteria to keep in mind:
Be in a declared disaster area
With the exception of the MREIDL, you’ll need to be located in a declared disaster area to be eligible to apply for SBA financing.
Use the SBA’s disaster declaration search tool to find out if your area qualifies.
Meet the specific requirements of your loan type
Each of the different SBA disaster loans has unique requirements that you’ll need to meet.
For example, if you want to apply for an EIDL, you’ll need to have a small business, small agricultural cooperative or an eligible private nonprofit. You’ll also need to show that you’ve suffered economic injury as a result of the relevant disaster and the SBA needs to be able to determine that you can’t access credit anywhere else.
Provide collateral
You may need to provide collateral to secure your SBA disaster loan:
SBA disaster loan | Collateral requirement |
|---|---|
Business physical disaster loan |
If you’re borrowing $200,000 or less and have other assets you can use, the SBA can’t require you to use your primary residence as collateral. |
Economic injury disaster loan | Loans of more than $50,000. |
Military reservists economic injury disaster loan | Loans of more than $50,000. |
Home and personal property loan |
|
What happens if you don’t have collateral?
You may still be able to qualify. The SBA takes a more flexible approach to collateral if it’s confident you can repay your loan.
Show repayment ability
You need to be able to show your ability to repay your SBA disaster loan. The SBA will use factors such as your personal credit score, personal finances and/or business finances to make this determination.
How to apply for an SBA disaster loan
Unlike other types of SBA loans, you apply for SBA loan disaster assistance with the U.S. Small Business Administration directly. Follow these steps to get financing:
1. Verify your eligibility and application deadlines
Before you begin with the actual application process, you should verify that your business is located in a declared disaster area and that you’re eligible for one of the available funding options.
You should also look for your applicable filing deadline. When the SBA publishes a disaster declaration with relevant financing information, it will specify when the application period begins and ends.
You’ll get two months from the declaration date to apply for physical damage applications and nine months for economic injury applications. Make sure you submit your application before the window closes.
For MREIDLs, you can apply for financing any time beginning on the date your employee receives notice of expected call-up and ending one year after the date that the employee is discharged or released from active service.
2. Prepare your application
You apply online through the SBA’s website after finding your declared disaster through the SBA disaster search tool. Before you apply, you’ll be asked to register for an online account with the SBA.
When you apply, you’ll need to provide at least the following:
- Personal contact information.
- Social Security number.
- Deed or lease information (if relevant).
- Insurance information.
- Financial statements and information, including personal and business income, monthly expenses and account balances.
- Employer identification number.
- IRS Form 4506-C, which gives the IRS permission to provide the SBA with your tax return information.
You’ll likely need additional information depending on the type of disaster loan. For example, for EIDL loans, you’ll need to submit monthly revenue information. For physical disaster loans, have photos and repair estimates ready.
It’s important to note that anyone with 20% or more ownership in the business will be required to sign an SBA personal guarantee.
If you have questions, the SBA offers a dedicated phone line for disaster loan applicants, available from 8 a.m. to 8 p.m. ET Monday through Friday (800-659-2955). You can also visit an SBA Recovery Center for in-person help.
3. Submit your application and wait
Once everything is complete, you can submit your application. The SBA will process your loan package — which may include sending a property inspector to estimate the cost of your physical damage.
Next, you’ll work with a loan officer who may request additional information or review insurance documents and recommend a loan amount.
Once the SBA receives your application, you may hear back with a decision in as little as two weeks. This funding timeline depends on how many other people are applying for disaster loans. For example, if applications top 250,000 or more in a year, it can take a month or longer.
4. Receive funds
When you receive approval, the SBA will send loan closing documents for you to review. You should read through your business loan agreement carefully and ask your assigned case manager any questions you may have.
Once you sign the documents, you’ll receive an initial disbursement within five business days.
Frequently Asked Questions
Do you have to pay back an SBA disaster loan?
Yes. SBA disaster loans are debt-based financing that you’ll have to pay back with interest. Payments are typically monthly, but you’ll get a 12-month grace period before your first payment is due.
What can you use SBA disaster loans for?
SBA disaster loans can be used to repair or replace damaged physical property caused by a declared disaster. Small businesses can also use these loans to cover operating expenses related to the impact of a declared disaster or of a core employee being called up to active service as a military reservist.
Are SBA disaster loans forgivable?
No, SBA disaster loans are not forgivable. The Paycheck Protection Program, however, was an exception to this rule — as it was specifically created to provide forgivable financing to small-business owners impacted by the COVID-19 pandemic.
How long does SBA disaster loan approval take?
The SBA can approve disaster loans in as little as two to three weeks, but this timeline can vary based on the number of applications the agency receives.
Article sources
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- 1.Congress. SBA Disaster Loan Program: Frequently Asked Questions. Accessed Sep 29, 2026.
