Economists estimate the disaster will cost between $10 and $20 billion in damage, and small business owners are likely to suffer economically as well, both from a lack of customers due to the inclement weather and from having to spend time and money on repairing damage to their storefronts. Business-specific costs abound as well, such as spoiled food at restaurants from lost power.
For Northeastern small business owners who are expecting devastating losses and costs to their businesses, there’s a bright spot through the clouds. The Small Business Association’s disaster loan program will be available for small businesspeople who have suffered damaged from the hurricane.
What are SBA Disaster Loans?
SBA Disaster Loans are low-interest, long-term loans for damages caused by a disaster. Their loans are available for physical damage to businesses as well as economic damage as a result of the natural disaster.
|Loan Type||Who is eligible||Loan cap||Loan use||Interest Rate|
|Physical Disaster Loans||Businesses of all sizes and nonprofits||$2 million||Repair damaged real estate, equipment, inventory and fixtures||<4% if you do not have credit elsewhere, <8% if you do have credit available elsewhere|
|Economic Injury Disaster Loans||Small businesses, small agricultural cooperatives, small aquaculture businesses and most nonprofits||$2 million||Expenses the businesses would have paid if the disaster had not occurred||<4% if you do not have credit elsewhere, <8% if you do have credit available elsewhere|
How do you apply for an SBA Disaster Loan?
Submit a loan application and an IRS form 8821, which gives the SBA access to your tax information.
For more resources on Hurricane Sandy and your finances, please see:
- Top 3 Ways to Financially Weather Hurricane Sandy
- 2 Major Banks Waiving Fees for Northeast Customers
Businessman with umbrella image from Shutterstock