SBA filed its first disaster declarations under the Rural Communities Act
Residents affected by recent disasters in Alabama, Nevada and California are now eligible.
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Administrator Isabella Casillas Guzmán, head of the U.S. Small Business Administration (SBA), recently highlighted the agency's first disaster declarations that are based on the Rural Communities Act, which expanded access to federal loans for affordable disaster relief in rural communities.
According to the announcement, businesses and residents affected by recent disasters in Alabama, Nevada and California are now eligible for low-interest disaster loans from the SBA under this new assistance expansion that was implemented in June.
Casillas Guzmán stated through a press release:
The SBA’s new disaster declaration process for rural communities will allow us to deliver crucial resources to those impacted, no matter where they are.
Support For Rural Communities
The release also noted that these are the first rural declarations following the June implementation of the Rural Communities Act, which authorized the SBA to streamline the process for a governor or chief executive officer of a tribal government to request a disaster declaration from the agency in counties with rural communities that have suffered significant damage.
With the new changes, a declaration can now be made with only one property damaged in a rural area when the county has received a major disaster declaration from the President of Public Assistance.
“These are the first declarations that will benefit from the Rural Communities Act, bipartisan legislation signed by President Biden, which will ensure that more small businesses, nonprofits, renters, and homeowners in disaster-impacted communities in Nevada and across the U.S. can access SBA’s disaster assistance so they can focus on rebuilding their communities,” added Casillas Guzmán.
Under the declaration parameters, businesses of all sizes and private nonprofit organizations may borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory, and other business assets.
“The Rural Communities Act grants SBA additional disaster declaration authority to assist underserved communities in rural areas with significant damage. Rural communities face unique challenges in recovering from economic hardships of a disaster given the limited availability of resources, and the SBA is here to help fill those gaps,” said Francisco Sánchez Jr., associate administrator at the Office of Disaster Recovery and Resilience.
Who is it for?
Businesses that may apply for these benefits are small businesses, small agricultural cooperatives, small aquaculture businesses, and most private nonprofit organizations of any size.
Clarifying that economic injury assistance is available regardless of whether the business suffered any property damage, SBA notes that economic injury disaster loans were designed to help meet working capital needs caused by the disaster.
As of July 31, disaster loans of up to $500,000 are available for homeowners to repair or replace damaged or destroyed real estate.
Additionally, homeowners and renters are eligible to receive up to $100,000 to repair or replace damaged or destroyed personal property, including personal vehicles.
SBA may also lend additional funds to businesses and homeowners to help with the cost of improvements to protect, prevent, or minimize future damage from disasters.
These are the main characteristics of the credits:
- Interest rates can be as low as 4% for businesses
- 2.375% for private non-profit organizations
- 2.375% for owners and tenants with terms up to 30 years
- Loan amounts and terms are set by the SBA and are based on each applicant's financial condition
- Interest does not begin to accrue until 12 months after the disaster loan's first disbursement date
- SBA disaster loan repayment begins 12 months after the date of first disbursement
All interested parties can apply online, receive additional information on disaster assistance, and download applications by clicking here.