The U.S. Small Business Administration is gearing up for a spike in demand for disaster loans from owners of businesses of all sizes whose property was damaged in Hurricane Sandy and its aftermath. It also expects applications to surge for a separate type of loan specifically for small businesses and nonprofits that replaces working capital lost while a company is closed due to a storm, even if its physical property was undamaged. The maximum for both types of loans is $2 million.
Unlike the SBA’s better-known loan guarantee program, in which the agency backs small business loans obtained through commercial lenders, disaster loans are made directly from the government. The 30-year, 4 percent loans are available to business owners in federally declared disaster areas. So far, that includes selected counties in New York, New Jersey, and Connecticut, but with storm damage still being evaluated, the coverage area is likely to expand, says D. Jelani Miller, public affairs specialist with the SBA’s Office of Disaster Assistance in Atlanta.
Source: Bloomberg Businessweek. Read full article. (link)