August 4, 2014

Disaster Loans Help Businesses, Homeowners

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Disaster Project Logo“Auditing the Storm: Disaster 4117” is a joint investigative series by Oklahoma Watch and KGOU Radio on how federal and state disaster aid is being spent in the wake of the violent tornadoes and storms of spring 2013. Installments will roll out July 13-16 and resume July 21.
Sunday, July 13: An overview.
Monday: Disaster-Aid Cash Could Flow for Years
Tuesday: Mixture of Relief Aid Helps Revive Moore Schools
Wednesday: Thousands of Aid Requests End in Rejection

Monday, July 21: Moore, Other Damaged Areas Shut Out of Prevention Aid
Wednesday, July 23: State, Cities Scramble to Spend Community Storm Grants
Monday, July 28: Disaster Loans Present Dilemma for Victims
Tuesday: Aug. 5: Hotel With Largest Approved Disaster Loan Faced Challenges

U.S. Small Business Administration disaster loans are meant to help get people and businesses affected by a disaster back on their feet.

The loans are offered to help recipients make repairs and deal with financial setbacks related to the disaster.

Unlike traditional SBA loans, which are given through private lending institutions and backed by the federal government, disaster loan funds are taxpayer dollars that come directly from the U.S. Treasury. They have lower interest rates and repayment periods that can extend up to 30 years, said Mark Randle, a spokesman for the SBA’s Office of Disaster Assistance.

Disaster loans become available after a presidential disaster declaration, such as for Disaster 4117 covering May 18 through June 2, 2013, in Oklahoma. Loans are extended for owners of homes or businesses only within the declared disaster area and only for damage sustained as a direct result of the disaster, Randle said.

For businesses, SBA disaster loans can be given both for physical damage and economic damage, with a loan limit of $2 million, he said.

The SBA sends inspectors out to verify the physical damage and also collects tax and other financial information from the business to verify economic damage, Randle said.

Among the factors in approving a loan is an applicant’s cash flow and existing obligations. If an applicant was having problems with financial obligations before the disaster, there is a less of a chance that a disaster loan would be approved, he said.

“We’re looking to help those businesses that would have been fine had the disaster not occurred,” Randle said.

Clifton Adcock can be reached at cadcock@oklahomawatch.org


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