SBA provides assistance to victims of natural disaster

7/26/2011

Following a flooding disaster in North Dakota, the Small Business Administration is counseling victims to apply for loans as soon as possible, as an August 23 deadline looms. SBA loans can be used to cover the cost of damages to their home or retail property, but getting an SBA loan won't be an option if affected residents don't apply by the deadline.

SBA loans for repairs or reconstruction range up to $200,000 for residences and up to $2 million for damaged businesses, with interest rates between 2.5 and 3 percent. Once a loan is approved, victims have 60 days to decide whether or not they want to take out a loan, so the SBA suggests applying even if one isn't sure he or she needs funding. Once the papers are signed, funding is released to flood victims as repairs warrant.

The Federal Emergency Management Agency will only provide financial assistance to flood victims who are denied loans by the SBA, which will also help homeowners refinance their mortgages if flood damage costs had a negative effect on their mortgage budget.

According to the SBA, applications require business owners to submit IRS form 8821, which gives the SBA access to your tax return information in addition to damage estimates, financial statements and any potential debt information.