The SBA runs four different programs as part of disaster assistance. They each have rules for how to qualify and the ways you can use the money from SBA disaster loans.
Here are a few you can choose from:
If a disaster damaged any of your physical assets, like buildings, equipment, machines, or inventory, you can take out a physical damage loan to repair or replace the property. Businesses of any size can use this program, not just small businesses.
You could potentially borrow up to $2 million through SBA disaster loans to handle losses that aren’t covered by your insurance. If you live in the disaster area, you can apply for a disaster loan to cover your personal losses. Homeowners can receive up to $200,000 to repair or replace their primary residence. Homeowners and renters can borrow up to $40,000 to replace property like furniture, cars and appliances.
The mitigation assistance program helps you rebuild your business or home so it's better protected against future disasters. You can use these funds for upgrades like elevating structures against future floods, strengthening buildings against wind damage, and anchoring rooftop equipment in-case of an earthquake.
To use this program, you first must have experienced damage from a previous disaster and qualified for an SBA physical damage loan. You can then apply for extra mitigation assistance.
Mitigation assistance could add another 20% of your confirmed physical damage losses to the loan balance, which you can then spend on mitigation measures. You have up to two years from your initial loan approval to apply for an SBA disaster loan increase for mitigation assistance.
The Small Business Administration realizes that a disaster does more than damage the property of small businesses. It could also cause financial losses when you’re forced to close and because you have fewer customers able to come in. As a result, you might struggle to pay your bills.
The Economic Injury Disaster Loan program helps businesses survive until they can get back to normal. Through this program, you can borrow money for the operating expenses you can’t pay because of the disaster. You can borrow up to $2 million through EIDLs to handle working capital expenses like rent, salaries, utilities, and fixed debt payments.
You could qualify for an Economic Injury Disaster Loan even if your business didn’t sustain any physical damage. You could also combine programs, using a physical damage loan to cover losses to your property and an EIDL for your economic losses. However, in order to use an EIDL, the SBA must determine you can’t qualify for credit anywhere else.
The military reservist loan program is for when an essential employee who is also a member of the US military reserves gets called up to active duty. Since this is another situation out of your control, the SBA helps small businesses deal with the financial hit.
The Small Business Administration will measure the economic damage that losing the employee causes your business. They will then loan you money through this program to help cover your operating expenses, based on the loss. You cannot use these loans to replace lost income or profits for the business.