DISASTER LOAN FREQUENTLY ASKED QUESTIONS
Submit a completed loan application and a signed and dated IRS form 8821 giving permission for the IRS to provide the SBA your tax return information. To process your application we (SBA) need current financial information such as a personal financial statement, a current profit-and-loss statement, balance sheet and a list of debts.
Can I use the disaster loan to expand my business?
The disaster loan helps restore property to pre-disaster condition, and, under certain circumstances, protects the structure from future disasters. It cannot upgrade or expand a business unless required by local building codes.
I already have a mortgage on my business.
Can the SBA refinance my mortgage?
The SBA can refinance all or part of a previous mortgage in some cases when the applicant does not have credit available elsewhere, has suffered uninsured damage (40 percent or more of the property value), and intends to repair the damage. SBA disaster loan officers can provide additional details.
How soon before I know I’ve been approved for a loan?
The sooner you return the completed loan application, the sooner the SBA can process it. The SBA tries to make a decision within two to three weeks. Make sure the application is complete. Missing information is a major cause of delays.
Is collateral required for these loans?
In a Presidential declaration, physical business loans over $25,000 must be secured to the extent possible. For Agency declarations, physical business loans over $14,000 must be secured to the extent possible. All EIDL loans over $25,000 must be secured to the extent possible.
Should I wait for my insurance settlement before I file my loan application?
No. Don’t miss the filing deadline by waiting for an insurance settlement. Final insurance information can be added when a settlement is made. The SBA can approve a loan for the total replacement cost, but any insurance proceeds that duplicate SBA’s loan must be applied to your SBA loan.
How may I use an Economic Injury Disaster Loan?
The loan provides working capital for disaster-related needs until your business or private, non-profit organization recovers. You may request an EIDL for the amount of economic injury but not in excess of what your business or private, non-profit organization could have paid if the disaster had not occurred. EIDL loans cannot
refinance longterm debts or provide working capital needed before the disaster. EIDL loans do not replace sales or lost profits.
Must I submit a personal financial statement with my loan application?
Yes. The SBA must review a financial statement for each owner and one for each partner, officer, director and stockholder with 20 percent or more ownership. The SBA requires the principals of the business to personally guarantee repayment of the loan, and in some instances to secure the loan by pledging additional collateral.
Facebook LiveChat with UHV SBDC on Disaster Recovery
What can you do before the storm?
- Learn about the hurricane risk for your general community, your industry, your specific location
- Contact local authorities
- Develop an evacuation plan
- Review flood safety & preparedness
- Assemble a Disaster Supplies Kit
- Assess your insurance needs
Ask about your community's emergency preparedness plan. The local emergency management office or local chapter of the American Red Cross should be able to provide you with details of this plan, including information on the safest evacuation routes, nearby shelters, and what conditions are necessary for recommended evacuation of certain areas.
Talk to your insurance agent. Remember – insurance is a service not a tax. Your insurance agent is an excellent resource for risk management information. Ask for information on the National Flood Insurance Program (NFIP) as well as Windstorm Insurance. You can find additional resources from the Texas Department of Insurance here.
Find up to date local weather information for your community through the National Weather Service’s Southern Region Headquarters map: http://www.srh.noaa.gov/ .
Hurricanes may not be an imminent hazard for your business or employees. But chances are that every community and every business will experience some sort of emergency within any given year. Emergency Preparedness is about examining your processes and taking steps to protect your employees and business assets. Visit our Small Business Emergency Preparedness information page at http://ptac.txsbdc.org/?s=emergency+preparedness&x=0&y=0 for additional resources and download the SBEP Brochure to build your Ready Kit. Taking some simple steps can help you protect your business and be Ready for Anything!
If you have more specific questions about Emergency Preparedness Planning or any other Human Resource related issues please contact Deirdre Pattillo, SPHR – Project Manager for Employer Services at the UTSA SBDC PTAC at Deirdre.Pattillo@utsa.edu .
TEXAS WORKFORCE DISASTER UNEMPLOYMENT ASSISTANCE
Applications for DUA must be submitted by September 27, 2017. TWCs website contains more information about Disaster Unemployment Assistance.Individuals can apply for disaster unemployment benefits online through Unemployment Benefit Services or by calling a TWC Tele-Center Monday through Friday between 8 a.m. and 5 p.m. at 800-939-6631.
GUIDES & RESOURCES
Getting Disaster Help from SBA
Three Step process for Disaster Loans
SBA Loan Disaster Reference Guide
TDI StormLink Resource Page
Resource Page On Benefits from Texas Workforce Commission
St. Bernard Project is a national nonprofit organization committed to helping residents and communities recover from disaster promptly and efficiently.
SBP is currently marshaling resources and we've committed to providing the following services to help support Harvey recovery efforts:
FEMA – Who, What, When, and
How of Filing Claims, Part 2
The Federal Emergency Management Agency (FEMA) is responsible for implementing the Robert T. Stafford Disaster Relief and Emergency Act, which authorizes federal assistance when the President issues a federal declaration for a Major Disaster or an Emergency. Hurricane Harvey was declared a Major Disaster on August 25, 2017. To apply for FEMA Assistance, individuals should register with FEMA within 60 days of the declaration of the disaster. You can apply online for Disaster Assistance.
FEMA, SBA, and Businesses
By now you may know that FEMA does not directly offer grant assistance to businesses and farmers. FEMA does, however, provide referrals for business owners and farmers, including to the Small Business Association (“SBA”). FEMA will refer an applicant’s registration to the SBA if the applicant’s income meets SBA minimum guidelines.
Only uninsured or otherwise uncompensated disaster losses are eligible for SBA loans. Further, unless used for business purposes, secondary homes, personal pleasure boats, airplanes, recreational vehicles, and similar property are not eligible for SBA loans. In addition to home loans for individuals and households, for businesses the SBA offers Business Physical Disaster Loans and Economic Injury Disaster Loans.
Business Physical Disaster Loans: These are loans to businesses to repair or replace disaster-damaged property owned by the business, including real estate, inventories, supplies, machinery and equipment. Businesses of any size are eligible. Private, non-profit organizations such as charities, churches, private universities, etc., are eligible. Business loans may be up to $2,000,000 for the repair or replacement of real estate, inventories, machinery, equipment and all other physical losses.
Economic Injury Disaster Loans (EIDL): These loans are working capital loans to help small businesses (including agricultural cooperatives and those engaged in aquaculture) as well as most private non-profit organizations. These loans are intended to help businesses meet ordinary financial obligations that cannot otherwise be met as a direct result of the disaster.
Collateral is required for physical loss loans over $25,000 and all EIDL loans over $25,000. The SBA takes real estate as collateral when it is available. The SBA may authorize loan terms up to a maximum of 30 years, but businesses with credit available elsewhere will have a maximum 7-year term.
When submitting a loan application, you will need:
- A signed and dated IRS Form 4506-T; and
- Current financial information such as a personal financial statement, a current profit-and-loss statement, a balance sheet, and a list of debts;
FEMA’s Public Assistance Program
Certain private non-profit organizations are also potentially eligible for FEMA Public Assistance funds. Qualifying private non-profits are those that provide services “of a governmental nature,” including for example:
- Educational services
- Medical care facilities that provide direct patient care, including hospitals, clinics, outpatient services, hospices, and nursing homes
- Emergency services, such as fire and rescue
- Utility services
- Certain irrigation facilities
In addition, eligible entities providing “essential” services also often include:
- Museums and zoos
- Performing arts and community arts facilities
- Community centers and libraries
- Homeless shelters
- Rehabilitation facilities and senior citizen centers
- Low income housing facilities
Eligible organizations must have an effective ruling letter from the IRS at the time of the disaster granting tax exemption under Sections 501(c), (d), or (e) of the Internal Revenue Code, or evidence from the State that the organization is a non-revenue producing, nonprofit entity organized or doing business under State law.
Public Assistance Application Requirements: An applicant (sometimes also called a “subgrantee”) for Public Assistance must apply for assistance using a Request for Public Assistance form. This form is typically submitted at what is called an “Applicants’ Briefing.” The briefing, which is conducted by a representative of the State for potential Public Assistance applicants, will address application procedures for state and local governments as well as eligible private non-profits. FEMA and Texas officials will likely announce scheduled briefings shortly.
If an applicant is unable to submit the Request at the briefing, the applicant must submit the form within 30 days of the date of designation of the area for Public Assistance. Note that an applicant does not need to wait until all damage is identified before requesting assistance. Rather, an applicant has 60 daysfollowing its first substantive meeting with the State Public Assistance officials and FEMA (which is generally called a “Kickoff Meeting” and led by a “PAC Crew Leader”) to identify and report damaged facilities to FEMA.
Applicants for Public Assistance must also file an application for a disaster loan from the SBA. If an SBA loan is declined or does not fully cover the damage eligible under the PA Program, the private non-profit organization may be eligible for FEMA assistance.
Eligible Public Assistance entities will be responsible for a long list of obligations, including but not limited to:
- Providing documentation and personnel to work with FEMA and the State in the damage assessment and project application processes;
- Completing its recovery actions; and
- Documenting the use of all funds provided by FEMA in accordance with federal and state contracting requirements.
Additional FEMA disaster relief for individuals and households
FEMA provides financial Housing Assistance through funds paid directly to eligible individuals and households, including:
- Rental Assistance, which is financial assistance to rent alternate housing accommodations while an applicant is displaced from his or her primary residence;
- Repair assistance to repair an owner-occupied primary residence, utilities, and residential infrastructure, including privately-owned access routes (i.e., driveways, roads, or bridges) to a safe and sanitary living or functioning condition; and
- Replacement assistance to help replace an owner-occupied primary residence when the residence is destroyed.
Primary residence generally means the home where the FEMA applicant normally lives during most of the year. FEMA may also provide manufactured homes to use as temporary housing. Applicants (both owners and renters) must be able to prove they occupied the damaged dwelling,
pre-disaster, as their primary residence before receiving Assistance. Where applicable, FEMA will also verify ownership through inspection, public records search, or applicant-submitted documents.
Additional available Assistance under FEMA’s Federal Assistance to Individuals and Households Program (“IHP”) includes but is not limited to:
- Unemployment Assistance
- Benefits and Distribution
- Food Commodities
- Legal Services
- Crisis Counseling
- Transportation Assistance
IHP provides financial assistance and direct services to eligible individuals and households who have uninsured or underinsured necessary expenses and serious needs. If you have applied for Assistance, a FEMA inspector will typically contact you within 10 to 14 days from the date of your application to schedule an appointment to assess you disaster damages.
Transitional Sheltering Assistance (TSA) is also available for eligible disaster survivors who are unable to return to their homes for an extended period of time and who have a continuing need for short-term lodging. To be eligible for TSA individuals and households must:
- Register with FEMA for assistance;
- Pass identity and citizenship verification;
- Have a primary residence located in an area designated for TSA; and
- Be displaced from their pre-disaster primary residence and unable to obtain lodging through another source.
For eligible applicants, FEMA will authorize and fund TSA through direct payments to participating hotels/motels.
Medical or Dental Expenses: FEMA also provides financial assistance to individuals and households with medical or dental expenses caused by a disaster (unless covered by insurance). Applicants for such assistance must submit documentation to indicate the expense was caused by the disaster, is medically-required, and to demonstrate the amount of expense, including for example itemized bills, receipts, or estimates from a medical provider, dental provider, or pharmacy.
Eligible expenses include costs related to:
- Injury or illness caused by the disaster;
- Pre-existing injury, disability, or medical condition aggravated by the disaster;
- Loss of prescription medications; and
- Loss or damage of personal medical or dental equipment.
Child Care: FEMA may provide up to 8 weeks of financial assistance to address disaster-caused child care expenses for eligible households with children aged 13 and under; and/or children aged 14 up to 18 with a disability, as defined by federal law, who need assistance caring for themselves.
Tax Deductions are Available for Taxpayers with Hurricane Harvey-Related Damage and Loss
Taxpayers that have sustained property damage (for example, damage to homes and vehicles) as a result of Hurricane Harvey may be entitled to deduct the amount of such casualty loss against their income for federal income tax purposes to the extent not otherwise covered by insurance or other reimbursement. As many homes and businesses affected by Hurricane Harvey were not covered by flood insurance, the casualty deduction will likely be available to many taxpayers. As a result of the deduction, taxpayers may be able to use cash that had otherwise been set aside to pay taxes to repair their homes and replace their property.
The deductible loss will be limited in the case of personal property to the lesser of:
- the original acquisition cost of the property (plus any improvements made thereon), or
- the loss in value of the property as a result of the damage.
Such loss will be further reduced by insurance payments and other reimbursement, if any, casualty gains and 10% of the taxpayer’s net income for the year claimed. Further details on the calculation of such deductions can be found by using IRS Form 4684, Casualties and Thefts.
To the extent the casualty loss relates to a FEMA declared disaster area, as unfortunately is the case with the majority of counties impacted by Hurricane Harvey, such losses may be deducted on the federal income tax return for the immediately preceding tax year, thereby providing cash refunds on an expedited basis to be used to cover expenses (for example, a 2017 disaster loss could be deducted against 2016 income when such return is filed or amended).
For more information, contact Nate Smithson.
5 tips to recover safely from disasters
After Hurricane Harvey, employers face a variety of hazards in cleaning up facilities and worksites, including fall and lifting hazards, rodents, snakes and insects, electrocutions, noise, cut/laceration hazards; high ambient temperatures; hazardous substances; or infectious materials. The Occupational Safety and Health Administration (OSHA) provides guidance to help employers keep their workers safe during cleanup and recovery operations after hurricanes and floods. Think about how you will protect workers and avoid other dangers with these prevention tips.
1 Determine the damage
Inspect all structures, surfaces, trenches, roadways, or other work areas to verify they are stable before allowing employees to enter. Have a registered professional engineer or architect certify that buildings are safe. Contact your insurance company as soon as possible to report property damage.
2 Be careful around electricity
Report downed power lines, frayed electric wires, or gas leaks to utility providers. Assume all electrical lines are energized, especially if there has been a power outage and you don’t know when the utility provider will restore power! Find locations where employees – or their power tools – could contact energized electric circuits. Turn off electrical systems, follow lockout/tagout procedures, and have a qualified electrician inspect equipment before resuming work.
3 Prevent cuts and lacerations
Use a wooden (not metal) pole to check flooded areas for pits or protruding objects. If employees cut themselves on sharp debris, provide first aid for minor cuts and scrapes and quickly seek medical attention if there are signs of infection. Cover cuts with bandages and wear waterproof gloves to prevent contact with contaminated water or body fluids. Wear chaps when using chainsaws.
4 Wear personal protective equipment
For all response or recovery tasks, OSHA recommends wearing approved foot, eye, head, and hand protection – including waterproof work boots, safety glasses with side shields, hard hats or helmets, heavy-duty leather gloves, and life vests (in deep water). To protect legs against snakebites, wear snake boots or gaiters. Use insect repellent containing DEET or picaridin to prevent insect bites.
5 Don't forget to sanitize
Clean clothing, tools, and equipment with soap and water after contact with contaminated floodwater or chemicals. If you can’t access clean water, use a solution of ¼ cup bleach and 1 gallon water – then allow materials to drain and air dry. For information about safely disposing of containers of toxic or unknown substances, contact the National Response Center at 1-800-424-8802. Visit the DWC website at www.txsafetyatwork.com for more information about hurricane recovery safety.
As businesses reopen and employees return to work after Hurricane Harvey, DWC’s safety professionals are available to help employers identify safety and health hazards resulting from the storms and provide guidance on how to fix them. Request free help from DWC’s Occupational Safety and Health Consultation (OSHCON) Program today at 800-252-7031, option 1 or firstname.lastname@example.org. We can help you at your worksite or over the phone.
Steps for Cleaning Up After a Flood
After flooding, it is important to know how to clean up safely. Listen to local authorities to determine when it is safe for you to return home. Do not return home until local officials indicate it is safe to do so. Stay vigilant and monitor radio or TV stations for local emergency management officials’ guidance. Ensure water is safe to drink, cook, or clean with after a flood. Oftentimes local officials put a boil water order in place following a flood or hurricane.Remember, never run a generator inside your home, and keep it away from windows, doors, and vents.
Tips from FEMA for clean-up after returning home:
- Always wear protective clothing including long-sleeved shirts, long pants, rubber or plastic gloves and waterproof boots or shoes.
- Before entering your home, look outside for damaged power lines, gas lines, and other exterior damage.
- Take photos of your damage before you begin to clean up and save repair receipts.
- Get rid of mold. Mold may have contaminated your home, which raises the health risk for those with asthma, allergies, and breathing conditions. Refer to the Center for Disease Control for more info on mold.
- Open doors and windows so your house can air out before spending any length of time inside.
- Turn off main electrical power and water systems and do not use gas appliances until a professional can ensure they are safe.
- Check all ceilings and floors for signs of sagging or other potentially dangerous structural damage.
- Throw out all foods, beverages, and medicines exposed to flood waters or mud including canned goods and containers with food or liquid.
- Throw out any items that absorb water and you cannot clean or disinfect (i.e. mattresses, carpeting, stuffed animals, etc.).
- Beware of snakes, insects, and other animals that may be on your property or in your home.
- Remove all drywall and insulation that has been in contact with floodwaters.
- Clean all hard surfaces (flooring, countertops, appliances, sinks, etc.) thoroughly with hot water and soap or detergent.
To learn more about what to do before, during, and after a flood or a hurricane, visit www.ready.gov/floods, Prepareathon’s™ Flood and Hurricane pages and the Centers for Disease Control and Prevention, Flood Water After an Emergency or Disaster.
If you experienced a flood or other damages due to recent hurricane activity, please visit www.disasterassistance.gov to register for federal assistance.