Businesses, homeowners begin disaster loan application process
The federal government has so far sent out 90,000 disaster loan applications to businesses, homeowners and renters who suffered damage from Hurricane Sandy. The loans are handled by the Small Business Administration, which handles all federal disaster loans, regardless of whether the disaster victim is a business, a homeowner or a renter.
SBA spokesman Richard Daigle said the agency has not yet approved its first Sandy loan, but he said once the application is completed and returned to the SBA, the agency will make a decision in 10 days. He said after last year's Hurricane Irene, the SBA approved 3,012 loans for a total of $119.4 million for New Jersey.
Laura Wallick, director of sales for the state Economic Development Authority, said, "We put together a similar program as we did for Irene. Through our premier banking partners, we're providing guarantees of commercial lines of credit up to $500,000. This is meant to help businesses restore their properties and buy equipment. We have in excess of 40 premier banking partners throughout the state as lenders for the program."
Daigle said the SBA is urging people to complete the loan application, even if they are not sure they want to borrow the money. "It gives you some options you can use to recover. You don't have to take the loan, but if you apply and are approved you have the choice to use the entire amount, part of it or none of it. It is better to have it there and have the ability to use the loan."
He said the federal disaster loan covers uninsured losses, and picks up where insurance leaves off. Homeowners and renters can borrow for up to 30 years at rates as low as 1.688 percent. Homeowners can borrow up to $200,000 for real estate losses and up to $40,000 for the personal contents of the home; renters can borrow up to $40,000.
Businesses and nonprofits can borrow up to $2 million for 30 years, at rates as low as 4 percent for businesses and 3 percent for nonprofits.
Businesses can get disaster loans for both physical damage and economic injury, such as "the business that had no wind or water damage, but they may have lost customers because the customers could not get to the business" during the disaster, Daigle said.