MO SBTDC offers help in accessing SBA disaster assistance loans

In response to the heavy rains and widespread flooding that afflicted many Missouri communities in the spring of 2017, FEMA announced that federal disaster assistance would be available for 27 counties.

Update July 17, 2017:
SBA amended their disaster declaration to include additional counties:

“SBA disaster assistance is available in Barry, Barton, Bollinger, Boone, Butler, Camden, Cape Girardeau, Carter, Cedar, Christian, Cole, Crawford, Dade, Dallas, Dent, Douglas, Dunklin, Franklin, Gasconade, Howell, Iron, Jefferson, Lawrence, Madison, Maries, McDonald, Miller, Mississippi, Morgan, New Madrid, Newton, Oregon, Osage, Ozark, Pemiscot, Perry, Phelps, Pike, Pulaski, Ralls, Reynolds, Ripley, Scott, Shannon, St. Louis, Ste. Genevieve, Stone, Taney, Texas, Washington, Wayne, Webster and Wright counties.”

FEMA says this assistance can include grants for temporary housing and home repair and low-cost loans to cover uninsured property losses:

  • Loans up to $200,000 for primary residence, $40,000 for personal property, including renter losses.
  • Loans up to $2 million for business property losses not fully compensated by insurance.
  • Loans up to $2 million for small businesses, small agricultural cooperatives and most private, non-profit organizations of all sizes that suffered disaster-related cash flow problems and need working capital to recover.
  • Loans up to $500,000 for farmers, ranchers and aquaculture operators to cover production and property losses, excluding primary residence.

Federal funding is also available to state and local governments and private nonprofit organizations on a cost-sharing basis for emergency work and the repair or replacement of facilities damaged by the severe storms, tornadoes, straight-line winds and flooding in these and other counties.

road disappearing into flood waterFor affected businesses, the Missouri Small Business & Technology Development Centers (MO SBTDC) has released the following disaster assistance guidelines and stands ready to assist business owners in accessing the resources they need to recover and rebuild.

SBA loans

The U.S. Small Business Administration (SBA) provides low-interest disaster loans up to $2 million to businesses of all sizes, private non-profit organizations, homeowners and renters. SBA disaster loans can be used to repair or replace the following items damaged or destroyed in a declared disaster: real estate, personal property, machinery and equipment, inventory and business assets. SBA will also often set up service centers near the disaster.

Flood damage can be a significant setback for many small businesses,” said Greg Tucker, state director of the MO SBTDC. “The business counselors of the MO SBTDC located statewide are acutely aware of the damage caused by the recent flooding and are standing by to assist in any way possible to affordably finance water removal, restoration and reconstruction.”

The SBA has two types of disaster loans — Economic Injury and Business Physical Disaster Loans. Business Physical Disaster Loans are only available if the president or SBA has declared a disaster, which has not yet occurred as of this writing.

SBA Economic Injury Disaster Loans

If you are a small business, small agricultural cooperative or private nonprofit organization that has suffered substantial economic injury, you may be eligible for an SBA Economic Injury Disaster Loan (EIDL) up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred.

Your loan amount will be based on your actual economic injury and your financial needs, regardless of whether your business suffered any property damage. Interest rate on EIDLs will not exceed 4 percent per year, and the term of a loan will not exceed 30 years. Repayment terms will be determined by your ability to repay the loan. EIDL assistance is available only to small businesses when SBA determines they are unable to obtain credit elsewhere.

Missouri loans

Small Business Disaster Loan Program

This loan, available via the Missouri Department of Economic Development, offers financial assistance and access to capital to businesses impacted by a natural disaster. This may include businesses sustaining direct property damage or local businesses sustaining interruptions to their operations and services because of temporary customer loss, temporary interference with access, or other impacts. Minimum loan amount is $2,500 and the maximum loan amount is $50,000. More information at Small Business Disaster Loan Program, including program guidelines and applications.

St. Louis County Port Authority loan fund

Businesses in St. Louis County impacted by flooding can access a special $500,000 loan fund to help rebuilding efforts. Interest-free loans up to $25,000 are being made available by the St. Louis Port Authority. For details, contact St. Louis Economic Development Partnership Vice President Joe Bannister at 314-308-5062 or jbannister@stlpartnership.com. Completed 2017 flood relief program loan applications (download PDF) should be emailed to Bannister.

Harmed-area Emergency Loan Priority System

The state treasurer activated the Harmed-area Emergency Loan Priority system, or HELP, a disaster relief program for Missouri small businesses and farms impacted by flooding on April 29 and April 30, 2017. HELP is administered through the Missouri Linked Deposit Program. Small businesses with up to 99 employees are eligible to receive a loan through about 115 lenders with 350 branches throughout Missouri. Find a list of participating lenders and program eligibility guidelines at treasurer.mo.gov/linkeddeposit.

Here are a few other helpful tips:

  • These loans are true loans, not grants, with all the terms, due diligence and other requirements of any other loan.
  • Standard loan credit and lending standards also still apply.
  • Your loss should be fully documented, ideally with pictures. Before and after pictures will also help you better tell your story and allow you to more easily rebuild.
  • You will need financial records and projections to prove you can carry the debt service of the disaster loan.
  • The SBA may ask for your home as collateral. The value of your business is probably not at its highest after a flood, and SBA may be stricter on collateral requirements.

MO SBTDCFor more information or to apply for a disaster loan, please contact a MO SBTDC office near you.

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