Recovering from Disaster with Low-Interest Government Loans

If you ever experienced the misfortune of having your dreams demolished by disaster, you'll understand how difficult it is to restart your life. However, you don't have to go it alone as government assistance may be available to you. Though many people are familiar with the grant program from FEMA, many do not know that low-interest loans from the Small Business Administration (SBA) are also available.

Whereas the FEMA grant program takes care of immediate needs, the SBA's Office of Disaster Assistance helps long-term recovery by providing low-interest long-term loans to homeowners, renters, and of course business owners.

As long as you live or operate a business that was damaged in an area declared under a presidential deceleration as a disaster, you may be eligible to apply. Though rates fluctuate, as of October 2011 the interest rate for a homeowner with credit not available elsewhere is 2.500%; business owners can expect interest rates as low as 4.000%. The loan funds may be used to replace or repair personal and business property damaged as a result of the disaster. An SBA employee would let you know the stipulations and usage of any loan proceeds.

So, how do you apply?

The easiest way to apply for this assistance is to apply in person at a disaster recovery center (DRC). At the DRC, SBA employees can assist you complete the application and quickly forward your application avoiding any delays. To find a DRC nearest you, check out the FEMA DRC locator. You may also apply on-line with an electronic loan application (ELA).

What should I have to apply?

• Property damaged under a presidential emergency declaration.
• Before applying for an SBA loan, you should register with FEMA.
• You must know what assets and what liabilities you currently have.
• If you have been working at your place of employment for less than two years, you may need a current pay stub.
• All of your insurance policy information, even of your agency has rejected your initial claim.
• Business owners will need more information, including: most current tax return, schedule of liabilities, current P&L, and personal financial statements.
• Again, an SBA employee will help you through the application process and will let you know what information you need to apply.

Helpful Hints:

Nobody plans on being a disaster victim, but there are things you can do to prepare yourself and your family to make a safe and speedy recovery.

• Always have at least three days of survival supplies readily at hand. Check out the government readiness website for information on building survival kits.
• Keep all of your important documents (mortgage, tax records, insurance policies, stock certificates, etc.) in a waterproof and fireproof locked security box.
• Keep copies of your important documents in a waterproof map pouch inside of your family survival kit.
• Think about storing scans of documents and records on something like a cloud drive or similar online storage system. I would use the same sort of system to backup photos, videos, and other irreplaceable memories.