Time is winding down for businesses and homeowners affected by Hurricane Sandy to apply for loans from the U.S. Small Business Administration.
SBA spokeswoman Kathy Cook said storm victims have until Friday to apply for low-interest SBA loans. The agency has issued some 172,000 loan applications to business and homeowners, but as of last week, had received only 25,722 completed applications.
Of those completed applications, 7,565 have been approved, resulting in more than $515 million worth of loans.
Cook said there are many reasons people might be slow or reluctant to file their applications. For instance, would-be applicants may be waiting to apply for a loan until they know how much their insurance will pay, but Cook said that's not necessary, as an applicant can cancel the loan application at a later date if insurance covers all their need. If the loan's already been issued, a homeowner or business can use the insurance money to help pay off the loan, she said.
In other words, Cook said, storm victims have the flexibility to change their minds even after they apply for a loan. What's not flexible, she said, is the requirement that applications be filed by the Friday deadline.
"We want people to realize this is an opportunity for recovery and it's not always available," she said.
The SBA offers loans of up to $200,000 for homeowners to fix damaged real estate, and up to $40,000 for homeowners and renters to replace lost or damaged personal property, such as clothes, furniture and cars.
Businesses and nonprofits, meanwhile, can get up to $2 million to repair and replace physical assets damaged by the storm.
Applications for all of the above programs are due Friday.
Marilyn Diane Phillips, owner of Serenity Day Spa, in Jersey City, said she was able to get her business up and running quickly as a result of an SBA loan.
In a press release, Phillips said she encourages other business owners to follow suit.
"If you're a true entrepreneur, don't give up," she said. "The SBA provides a very low-interest-rate loan, and they are very reasonable in terms of the repayment structure. So I would say, think more about your business than it just being a loan. Think about your employees and getting them back to work."
The SBA also grants working capital loans to businesses to cover operating expenses until business returns to normal. These "economic injury" loans are the one type of loan application not due Friday. Instead, applicants have until the end of July.
"Lots of businesses may not have sustained any physical damage, but they're suffering because of road construction, or because their customer base has relocated because they can't live in their houses now — or just because of the customers not being able to afford to go out to restaurants," Cook said.
The SBA will provide loans to help businesses pay their bills until that business returns, she said.
Cook said some homeowners may be confused when they receive an SBA loan application, since the agency typically works with small businesses. But she said SBA is authorized to provide long-term assistance to homeowners and renters in cases of disasters like Sandy.
SBA loans carry interest rates as low as 4 percent for businesses, with even lower rates for nonprofits and homeowners. Loan terms range up to 30 years. At present, Cook said the average loan processing time is about 21 days.
Cook said the application process takes only about 30 minutes for homeowners and renters. Businesses, meanwhile, can access help in filing their applications at any of the state's Small Business Development Centers, its Women's Business Centers or SCORE Association offices. Phillips, for instance, met with a counselor at her local SBDC to help with the loan process.