Business Disaster Loans

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As the Business Physical Disaster Loans suggest, Business Physical Disaster Loans help rebuild businesses that have suffered losses and damages due to a disaster through repairing and replacing buildings, equipment, inventory and fixtures. They are not restricted to a particular type of business. Both small or large businesses and private or not-for-profit businesses are eligible for these loans. These government loans can also be used for upgrading business facilities to prevent future damages due to disasters of a similar nature and also for relocation of the business in certain instances. Here are some frequently asked questions about these government loans.

Is it difficult to get a Business Physical Disaster Loan?

This Government Loan has an application procedure that is similar to that of a bank loan. The procedure is simple. It requires certain financial and tax related documents to be attached to the application form along with a list of damages and estimated costs, at the time of submission. Once this is done, there is usually a wait period of between one and three weeks during which time the extent of damage to the business’ property is assessed by a representative to ensure that the costs are accurate and within permissible limits. If everything is found to be in order, the business will get the government loan.

Can a business get this loan if their property and assets are insured?

If a business has insurance, then it can recover some of the losses or damages by filing a claim with the insurance company. However, this will take time to be resolved. The Business Physical Disaster Loan implies that financing will be provided to make good on any losses suffered due to a disaster and this is true. Instead of waiting for the insurance claim to be processed, the business can apply and get the SBA loan. Then, on receipt of the insurance, the government loan recipient proceeds use it toward settlement of the loan.

Can I use these Government loans for any other purpose once they are sanctioned?

No. The Business Physical Disaster Loan has been given by the SBA to distinguish the purpose for which it may be used. Hence, the amount of finance received through this Government loan must be used only for the specific expenses listed in the application form. Any deviation from the list could result in an immediate penalty that would require the business to pay back the original amount plus a 50% penalty on the original loan amount. Hence, it is in the best interests of the business not to misuse the loan funds.