SBDCs Provide Disaster Recovery Assistance for Small Businesses in Texas
The Texas Gulf Coast experienced catastrophic devastation caused by Hurricane Harvey. The South-West Texas Border (SWTXB) SBDC Network and affiliate Centers at the Del Mar College SBDC, University of Houston-Victoria SBDC, and Texas State University SBDC have coordinated with FEMA and the SBA to provide disaster assistance to small businesses in the affected areas.
Some business owners are dealing with personal losses, in addition to varying levels of physical damage and economic injury to their businesses. Small businesses impacted by Harvey will face extreme challenges and will likely need to re-assess their business model and current and future markets. In addition, financial recovery, financial record reconstruction, and the management of accounts receivables and payables are all areas of business recovery that small business owners should begin considering.
Here's the List of All Declared Counties in Texas
for physical and economic injury in the Texas counties of: Aransas, Austin, Bastrop, Bee, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Hardin, Harris, Jackson, Jasper, Jefferson, Karnes, Kleberg, Lavaca, Lee, Liberty, Matagorda, Montgomery, Newton, Nueces, Orange, Polk, Refugio, Sabine, San Jacinto, San Patricio, Tyler, Victoria, Walker, Waller & Wharton;
for economic injury only in the contiguous Texas counties of: Angelina, Atascosa, Brooks, Burleson, Caldwell, Grimes, Guadalupe, Houston, Jim Wells, Kenedy, Live Oak, Madison, Milam, San Augustine, Shelby, Travis, Trinity, Washington, Williamson & Wilson;
Declared Counties in our Texas State SBDC Service Area
- Bastrop - Physical & Economic Injury
- Fayette - Physical & Economic Injury
- Lee- Physical & Economic Injury
- Caldwell - Economic Injury Only
- Travis - Economic Injury Only
- Williamson - Economic Injury Only
IMPORTANT: SBA Disaster Loan Application Deadlines
Physical Damage: November 30, 2017 *NOTE: Extended from October 24, 2017
Economic Injury: May 25, 2018
SBDC Advisors Help You Get Back to Business
Trusted advisors at the SBDC are ready help you through this difficult time. We'll take you through the SBDC Disaster Recovery Client Guide-- a 70+ page workbook with worksheets, checklists and valuable insight-- that will help you through every step of the process, including:
- Reconstruction of your financial position if you don't have access to the financial documentation of your business
- Helping you think through your options and talk about next steps and priorities
- Helping you develop a plan to re-establish your operations and plan for your future
- Helping you through the SBA Loan Application process
Click on the "Apply for SBDC Assistance" button below to complete a short intake form and we'll assign an SBDC advisor to contact you right away.
First Step - FEMA
We cannot stress this enough: REGISTERING WITH FEMA IS THE MOST IMPORTANT FIRST STEP IN YOUR SMALL BUSINESS DISASTER RECOVERY.
It's important to understand that FEMA DOES NOT provide grant assistance to businesses or farmers. You CAN'T apply for a loan through the SBA without having a FEMA case number. EXPECT TO BE DENIED for a grant when registering your business because FEMA does not provide grants to business owners. The reason you must register with FEMA is to be able to take the next step of applying with the SBA. Please also note that you should register with FEMA WHETHER OR NOT YOU HAVE INSURANCE.
Click here for the SBA News Release Regarding Hurricane Harvey (published on 11/7/2017)
Second Step - SBA
Getting Disaster Help from the SBA: What You Need to Know
WHAT TYPES OF DISASTER LOANS ARE AVAILABLE?
Business Physical Disaster Loans – 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 also eligible.
Economic Injury Disaster Loans (EIDL) – Working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period.
- Home Disaster Loans – Loans to homeowners or renters to repair or replace disaster-damaged real estate and personal property, including automobiles.
- Immediate Disaster Assistance Program (IDAP) - introduced by the SBA in 2010 but not widely known in the lending community, this is a quick way to get funds to a business that has suffered loss due to disaster. A 7(a) lender or an SBLC applies with SBA to be an IDAP delegated lender. Once approved, the lender can make interim loans of up to $25,000 to small businesses who have applied for an SBA Disaster Loan to tide them over until they get the Disaster Loan. Tip: Your SBDC advisor can help you find a delegated IDAP lender and help you with the loan application process.
WHAT ARE THE CREDIT REQUIREMENTS?
- Credit History – Applicants must have a credit history acceptable to SBA.
- Repayment – Applicants must show the ability to repay all loans.
- Collateral – Collateral is required for physical loss loans over $25,000 and all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but requires you to pledge what is available.
WHAT ARE THE INTEREST RATES?
By law, the interest rates depend on whether each applicant has Credit Available Elsewhere. An applicant does not have Credit Available Elsewhere when SBA determines the applicant does not have sufficient funds or other resources, or the ability to borrow from non-government sources, to provide for its own disaster recovery. An applicant, which SBA determines to have the ability to provide for his or her own recovery is deemed to have Credit Available Elsewhere. Interest rates are fixed for the term of the loan. The interest rates applicable for this disaster are:
|No Credit Available Elsewhere||Credit Available Elsewhere|
|Economic Injury Loans|
|Businesses & Small Agr. Co-ops||3.305%||N/A|
WHAT ARE THE LOAN TERMS?
The law authorizes loan terms up to a maximum of 30 years. However, the law restricts businesses with credit available elsewhere to a maximum 7-year term. SBA sets the installment payment amount and corresponding maturity based upon each borrower’s ability to repay.
WHAT ARE THE LOAN AMOUNT LIMITS?
- Business Loans – The law limits business loans to $2,000,000 for the repair or replacement of real estate, inventories, machinery, equipment and all other physical losses. Subject to this maximum, loan amounts cannot exceed the verified uninsured disaster loss.
- Economic Injury Disaster Loans (EIDL) – The law limits EIDLs to $2,000,000 for alleviating economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by SBA, less business interruption insurance and other recoveries up to the administrative lending limit. EIDL assistance is available only to entities and their owners who cannot provide for their own recovery from non-government sources, as determined by the U.S. Small Business Administration.
- Business Loan Ceiling – The $2,000,000 statutory limit for business loans applies to the combination of physical, economic injury, mitigation and refinancing, and applies to all disaster loans to a business and its affiliates for each disaster. If a business is a major source of employment, SBA has the authority to waive the $2,000,000 statutory limit.
- Home Loans – SBA regulations limit home loans to $200,000 for the repair or replacement of real estate and $40,000 to repair or replace personal property. Subject to these maximums, loan amounts cannot exceed the verified uninsured disaster loss.
WHAT RESTRICTIONS ARE THERE ON LOAN ELIGIBILITY?
- Uninsured Losses – Only uninsured or otherwise uncompensated disaster losses are eligible. Any insurance proceeds which are required to be applied against outstanding mortgages are not available to fund disaster repairs and do not reduce loan eligibility. However, any insurance proceeds voluntarily applied to any outstanding mortgages do reduce loan eligibility.
- Ineligible Property – Secondary homes, personal pleasure boats, airplanes, recreational vehicles and similar property are not eligible, unless used for business purposes. Property such as antiques and collections are eligible only to the extent of their functional value. Amounts for landscaping, swimming pools, etc., are limited.
- Noncompliance – Applicants who have not complied with the terms of previous SBA loans may not be eligible. This includes borrowers who did not maintain flood and/or hazard insurance on previous SBA loans.
Note: Loan applicants should check with agencies / organizations administering any grant or other assistance program under this declaration to determine how an approval of SBA disaster loan might affect their eligibility.
Important Contact Information
SBA’s Disaster Assistance Customer Service Center:
Deaf and hard-of-hearing individuals may call (800) 877-8339.
Applicants may also apply online using the Electronic Loan Application (ELA) via SBA’s secure Web site at https://disasterloan.sba.gov/ela.
SBDC Disaster Recovery Client Guide
This detailed guide was originally created by our colleagues at the Vermont SBDC after Hurricane Irene. It includes best practices learned in the process of helping hundreds of SBDC clients through the recovery effort. You are welcome to download the guide, but please know that it can be overwhelming if you try to work through this on your own. We're here to help you through the guide-- in small chunks-- so that it's more manageable during this difficult time. Your SBDC advisor will give you a copy during your first visit. Complete our short intake form to get started.