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SBA Low-Interest Disaster Loans for Small Businesses in Texas


SBA Low-Interest Disaster Loans for Small Businesses in Texas

Small businesses are the backbone of the Texas economy and community. When disasters strike, they can be devastating for small business owners. The Small Business Administration (SBA) offers vital assistance to help small businesses recover after declared disasters, providing business loans and low-interest financing to rebuild. In this post, we'll explore the range of SBA disaster assistance available to Texas small businesses recently impacted by destructive events across the state.


Article Outline


  1. SBA Disaster Loans Help Offset Economic Losses

  2. Am I Eligible to Apply for an SBA Disaster Loan?

  3. How Do I Apply for an SBA Disaster Loan?

  4. What Are the Loan Terms and Loan Program Details?

  5. SBA Disaster Assistance Available for Recent Texas Disasters

  6. Local Resources Support Texas Small Business Recovery

  7. Key Takeaways


SBA Disaster Loans Help Offset Economic Losses


The SBA makes low‐interest federal disaster loans available to small nonfarm businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private nonprofit organizations impacted by declared disasters. These business loans help offset economic losses because of reduced revenues or increased expenses after a destructive event like severe storms, flooding, or wildfires. 


SBA disaster loans have interest rates as low as 4% for small businesses and 2.375% for private nonprofit organizations. They can be used for working capital and normal operating expenses the business could have paid if the disaster had not occurred. SBA disaster loans provide vital assistance so small business owners can rebuild, reopen, and recover after a crisis.


The loans help small businesses offset economic losses and regain their financial footing. With long repayment terms up to a maximum of 30 years, SBA disaster loans make recovery more manageable for small business owners facing hardship after a disaster.


Am I Eligible to Apply for an SBA Disaster Loan?


Small businesses and most private nonprofits must have suffered substantial economic losses in a declared disaster area to be eligible for SBA disaster assistance. Agriculture interests can also apply, including small farms, ranchers, and aquaculture businesses that experienced losses due to the disaster.


Eligibility covers the economic impacts on small businesses directly dependent on small farmers and ranchers that suffered agricultural production losses from the destructive event. Small nonfarm businesses and most private nonprofits located in declared disaster areas and neighboring counties in Texas may be eligible to apply for low‐interest SBA federal disaster loans.


How Do I Apply for an SBA Disaster Loan?


To begin the SBA disaster loan application process, visit DisasterLoanAssistance.sba.gov. You can also download and mail a paper application to the SBA office. Include your financial information, including income, expenses, and documentation of the disaster's economic impact. Approved loans can provide up to $2 million to help meet financial obligations and operating expenses.


Call SBA's Disaster Assistance Customer Service Center at 1-800-659-2955 for assistance. Dial 7-1-1 to access telecommunications relay services. After submission, borrowers can check their application status online through the SBA electronic loan portal. Contact your nearest SBA local office to receive additional disaster assistance information and download applications. SBA staff can provide information on SBA disaster assistance programs and help prepare your submission.


What Are the Loan Terms and Loan Program Details?


SBA disaster loans of up to $2 million are available to eligible small businesses and private nonprofits. The maximum term is 30 years, and interest rates are 4 percent for small businesses and 2.375 percent for nonprofit organizations. Loan approval is based on the financial impact of the disaster.


Businesses directly impacted by a declared disaster may be eligible for an SBA Economic Injury Disaster Loan (EIDL). These working capital loans help meet financial obligations and operating expenses after a disaster. Interest rates on EIDLs are low at 4 percent for small businesses.


Another option is the SBA 504 loan program, which provides long-term, fixed-rate financing for major fixed assets like real estate and equipment. SBA 504 loans involve a lender and a Certified Development Company (CDC). 


SBA Disaster Assistance Available for Recent Texas Disasters


Recent hazardous weather triggered SBA disaster declarations for multiple impacted Texas counties:


  • SBA offers low-interest loans to small businesses in Cameron County affected by a severe winter storm that began on February 3, 2022. The Secretary declared this disaster on April 14, 2022, opening access to SBA assistance.


  • Small businesses in Houston County impacted by severe thunderstorms and tornadoes on March 21, 2022, can apply for SBA federal disaster loans. The SBA declaration came on May 5, 2022.


  • An SBA declaration on April 14, 2022, made disaster loans available to small businesses in Harris County affected by severe storms, straight-line winds, and flooding beginning March 30, 2022. 


"Eligibility for these loans is based on financial impacts including loss of revenue, the cost of reopening, and physical property damage," said Ashley Bell, a spokesperson for SBA's Disaster Field Operations Center-West. "We encourage any small business or private nonprofit with questions to connect with our disaster assistance team."


Local Resources Support Texas Small Business Recovery 


The Governor's Office of Small Business Assistance details state programs to support small business growth. Small businesses can also connect with an SBA-preferred lender like Texas Capital Bank or Ameris Bank, which is experienced in SBA lending. These lenders can access SBA guarantees to help small businesses expand.


Contact local SBA district offices, Small Business Development Centers (SBDCs), Women's Business Centers, and SCORE mentors for personalized advice and skills training for small business recovery needs. Rural businesses can find support through the Texas Agricultural Extension Service and other business incubators. 


The Texas Workforce Commission funds business skills training, including entrepreneurship programs. Local Chambers of Commerce connect small businesses with state and federal resources. Texas small businesses can rebuild smarter and stronger after a disaster with proper assistance.


Key Takeaways


  • SBA low‐interest federal disaster loans help small businesses offset economic losses from reduced revenues or higher expenses after disasters.

  • Small nonfarm businesses, agricultural cooperatives, aquaculture firms, and most private nonprofits in declared disaster areas can apply.

  • Interest rates are 4% for small businesses and 2.375% for nonprofits with terms up to 30 years.

  • Apply online through the SBA electronic loan portal or contact disaster assistance centers.

  • Visit SBA local offices for disaster assistance information and download application forms.

  • Recent SBA declarations opened aid for Texas small businesses in counties impacted by severe weather.

  • Connect with SBA-preferred lenders, SBDCs, SCORE, and local partners for small business recovery assistance.


With SBA disaster loans and support services, Texas small businesses can rebuild and emerge stronger than ever following crisis events. Proper assistance makes all the difference in effective disaster recovery and resiliency.


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