Spokesman explains SBA loan program, filing process

Applying for a low-interest disaster loan to repair or replace property damaged by hurricanes Gustav or Ike?

The good news for business owners and residents is that the U.S. Small Business Administra-tion has set up shop throughout Lafourche and Terrebonne parishes to help.

“The SBA is strongly committed to providing the most effective and customer-focused response possible to assist homeowners, renters and businesses of any size with federal disaster loans,” Sandy Baruah, acting administrator for SBA said in a release.

The SBA’s Communication Specialist Mark Randle recently outlined what locals should know before applying.

TPT: Who is eligible to apply for a low-interest disaster loan?

MR: Any homeowner, renter, business or private, non-profit organization is eligible.

TPT: Where are the SBA locations in the Tri-parish area?

MR: SBA is set up at the old Wal-Mart in Mathews and at the South Louisiana Economic Business Assistance Center in Thibodaux for Lafourche Parish residents, and at the old Bingo Hall on Barrow Street and at the Houma-Terrebonne Chamber of Commerce on Louisiana Highway 311 for Terrebonne Parish.

TPT: What do people need to do before applying?

MR: Homeowners and renters who receive a disaster loan application should complete and return it to SBA, even if they are not sure if they will need or want a loan. If SBA cannot approve the application, in most cases they refer residents to FEMA’s Other Needs Assistance program for possible additional assistance.

TPT: Should homeowners and businesses wait for insurance settlements before applying?

MR: No. If they do not know how much of their loss will be covered by insurance or other sources, then SBA will consider making a loan for the full amount of the loss, up to our loan limits, provided that they assign the insurance check to the SBA to reduce the amount of the loan.

TPT: How much can a homeowner, renter or business borrow?

MR: Homeowners can borrow up to $200,000 to repair and replace damaged or destroyed real estate. Homeowners can also borrow up to $40,000 to repair or replace damaged personal property. Businesses and private non-profits can borrow up to $2 million to repair and replace real estate, machinery and equipment, inventory and other business assets.

TPT: What are the interest rates?

MR: The interest rates can be as low as 2.875 percent for homeowners and renters, and 4 percent for businesses with terms up to 30 years. Loan amounts and terms are set by SBA and are based upon each applicant’s financial condition.

TPT: What information do they need to submit for the loan?

MR: The necessary information is specified in the loan application. In all cases, it includes an itemized list of personal property losses with the repair or replacement cost of each item. It also includes permission for the IRS to give the SBA information from your last two federal income tax returns. If a person has pictures of the damaged property, that can be included as well.

TPT: If the home is completely destroyed, can the SBA lend residents money to relocate somewhere else?

MR: If residents are unable to obtain a building permit to rebuild or replace their home at its original site, the cost of relocating your home might be included in the loan amount. If, however, they decide to relocate their home without being required to, an SBA loan can be obtained only for the exact amount of the damage.

TPT: Are secondary homes or vacation homes eligible for loans?

MR: No, not as homes. They may be eligible for business disaster loans under certain conditions.

TPT: Do applicants need flood insurance to get a loan?

MR: If they are in a special flood hazard area, they must have flood insurance before we can disburse a loan. The amount of insurance required is the insurable value of the property in the special flood hazard area but not to exceed the maximum flood insurance available under the National Flood Insurance Act.

TPT: Are damages to cars and mobile homes eligible?

MR: Generally, yes. The loan would be only for uninsured losses.

TPT: Will the SBA check the losses that are claimed?

MR: Yes. Once applicants have returned their loan applications, a SBA loss verifier will visit them to determine the extent of the damage and the reasonableness of the loan request.

TPT: How soon will they know if they qualify?

MR: That depends on how soon they file a completed SBA loan application. The SBA disaster relief program is not an immediate emergency relief program such as Red Cross assistance or temporary housing assistance. It is a loan program to help you in your long-term rebuilding and repairing. We try to make a decision on each complete application within seven to 21 days.

TPT: If they receive a disaster loan, can they spend the money any way they want?

MR: No. The disaster loan is intended to help you return your property to the same condition it was in before the disaster.

TPT: When is the application deadline?

MR: The filing deadline for Hurricane Gustav is Nov. 3. The filing deadline for Hurricane Ike is Nov. 12. The filing deadline for the Economic Injury Disaster Loan is June 2 and June 13 for the respective storms.

TPT: Is there a minimum monthly payment, and when would the first payment be due?

MR: The SBA does not have a minimum monthly payment. Payments vary depending upon income and expenses, size of family and other circumstances that may affect your repayment ability. Generally, the first payment is not due until five months after the date the loan is closed.