The Three Step Process: Disaster Loans

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The Three Step Process: Disaster Loans

The Three-Step Process:

Disaster Loans

The U. S. Small Business Administration (SBA) provides low-interest, long-term disaster loans to businesses of all sizes, private non-profit organizations, homeowners, and renters to repair or replace uninsured/underinsured disaster-damaged property. SBA disaster loans offer an affordable way for individuals and businesses to recover from declared disasters.

STEP 1:
Apply for Loan

Online
In-person at a disaster center
By mail.

Apply online at the SBA’s secure websitedisasterloan.sba.gov/ela.
As a business of any size, you may borrow up to$2 million for physical damage.
As a small business, a small agricultural cooperative, a small business engaged in aquaculture, or private non-profit organization you may borrow up to $2 million for economic injury.
As a small business, you may apply for a maximum business loan (physical and EIDL) of
$2 million.
As a homeowner, you may borrow up to$200,000 to repair/replace your disaster-damaged primary residence.
As a homeowner or renter, you may borrow up to $40,000 to repair/replace damaged personal property.

STEP 2:
Property Verified and Loan Processing Decision Made

SBA reviews your credit before conducting an inspection to verify your losses.
An SBA verifier will estimate the total physical loss to your disaster-damaged property.
A loan officer will determine your eligibility during processing, after reviewing any insurance or other recoveries. SBA can make a loan while your insurance recovery is pending.
A loan officer works with you to provide all the necessary information needed to reach a loan determination. Our goal is to arrive at a decision on your application within2 – 3 weeks.
A loan officer will contact you to discuss the loan recommendation and your next steps. You will also be advised in writing of all loan decisions.

STEP 3:
Loan Closed and Funds Disbursed

SBA will prepare and send your Loan Closing Documents to you for your signature.
Once we receive your signed Loan Closing Documents, an initial disbursement will be made to
you within 5 days:
- Physical damage:
  - $25,000
- Economic injury (working capital):
  - $25,000 (In addition to the Physical damage disbursement).
A case manager will be assigned to work with you to help you meet all loan conditions. They
will also schedule subsequent disbursements until you receive the full loan amount.
Your loan may be adjusted after closing due to your changing circumstances, such as
increasing the loan for unexpected repair costs or reducing the loan due to additional insurance
proceeds.

Required Documentation

The following documents are required to process your application and reach a loan decision. Your
Loan Officer and Case Manager will assist you to ensure that you submit the proper documentation. Approval decision and disbursement of loan funds is dependent on receipt of your documentation.

For Business:

Business Loan Application (SBA Form 5) completed and signed by the business applicant.
IRS Form 4506-T completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50%ownership in an affiliate business. (Affiliates include business parent, subsidiaries, and/or businesses with common ownership or management).
Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; an explanation if not available.
Personal Financial Statement (SBA Form 413) completed, signed and dated by the applicant (if a sole proprietorship), each principal owning 20% or more of the applicant business, each general partner or managing member.
Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used).
ADDITIONAL INFORMATION THAT MAY BE NECESSARY TO PROCESS YOUR APPLICATION:
Complete copies, including all schedules, of the most recent Federal income tax returns for each principal owning 20% or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50% ownership in the affiliate business. Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management.
If the most recent Federal income tax return has not been filed, a year-and profit and loss statement and balance sheet for that tax year are acceptable.
A current year-to-date profit and loss statement.
Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.

Homeowners and Renters:

Home Loan Application (SBA Form 5c) completed and signed by Applicant and Co-Applicant.

IRS Form 4506-T completed and signed by the Applicant and Co-Applicant.

For more information please feel free to contact us at info@millermusmar.com or call us at 703-437-8877.

MillerMusmar CPAs is an established accounting firm with offices in Reston, and Virginia. We have a twenty-five-year history of providing top quality auditing, tax, and accounting services to clients throughout the Washington Metropolitan area and internationally. By combining the expertise of a mid-sized firm with the personal attention, we are both large and small enough to deliver a responsive service to our clients. For more information, please visit our website at www.MillerMusmar.com.