Physical Disaster Loans (59.008)
Program
59.008 Physical Disaster Loans
Federal Agency
Agency: Small Business Administration
Authorization
Small Business Act of 1953, Public Law 91-606.
Program Number
59.008
Last Known Status
Active
Objectives
To provide loans to the victims of declared disasters for uninsured or otherwise uncompensated physical damage.
Types of Assistance
DIRECT LOANS
Uses and Use Restrictions
Loans made to homeowners, renters, businesses of all sizes, and nonprofit organizations to repair or replace damaged or destroyed real property and/or personal property to its pre-disaster condition. Credit elsewhere test required for all applicants to determine interest rate. Loans to homeowners/tenants are made for up to 30 years. Limit of $200,000 for repair/replacement of real property; $40,000 for repair/replacement of personal property. The loan limit may be increased by 20 percent to provide protective measures from damages caused by physical disasters. The interest rate for homeowners/tenants who have credit available elsewhere is determined by a formula based on the cost of money to the U.S. Government, but not to exceed 8 percent. The interest rate for homeowners/tenants who do not have credit available elsewhere is one-half of the formula rate, but not to exceed 4 percent. Loans to business may not exceed $1,500,000. For businesses determined to be able to obtain credit elsewhere, the interest rate is based on a statutory formula, but not to exceed 8 percent, with maturities not to exceed 3 years. For nonprofit organizations determined to be able to obtain credit elsewhere, the interest rate is based on a statutory formula, with maturities not to exceed 30 years. For businesses and nonprofit organizations determined to be unable to obtain credit elsewhere, the interest rate may not exceed 4 percent, with maturities up to 30 years. Under certain circumstances, homeowners and businesses may be eligible for refinancing of existing liens. There are statutory restrictions on the use of funds for voluntary relocation. In the case of a Major Source of Employment, the $1,500,000 limitation on disaster business loans may be waived. Provisions of Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 apply. Collateral is required on loans greater than $10,000. Additional information provided on SBA's website at sba.gov. Additional information provided on SBA's website at sba.gov. Additional information provided on SBA's website at sba.gov.
Eligibility Requirements
Applicant Eligibility
Eligible applicants must have suffered physical property loss as a result of a disaster which occurred in an area declared by the President or SBA. They must also demonstrate an ability and willingness to repay the loan. Individuals, business concerns, charitable and nonprofit organizations are eligible to apply for assistance.
Beneficiary Eligibility
Individuals, business concerns, charitable and nonprofit organizations. Agricultural enterprises are ineligible.
Credentials/Documentation
A signed loan application, financial information, and a signed IRS Form 8821 to enable SBA to obtain tax return information from IRS for the three years prior to the disaster (one year for homeowners and renters). Complete copies of Federal Tax returns for the past three years for business applicants. Financial information on principals and affiliates for business applicants. This program is excluded from coverage under OMB Circular No. A-87.
Application and Award Process
Preapplication Coordination
Preapplication coordination is required. Environmental impact information is not required for this program. This program is excluded from coverage under E.O. 12372.
Application Procedure
This program is excluded from coverage under OMB Circular No. A-102. This program is excluded from coverage under OMB Circular No. A-110. Application is made on a standard form for either a home or business loan and filed by mail or with the nearest SBA Disaster office.
Award Procedure
Applicant is notified of approval by authorization letter from SBA.
Deadlines
Contact the headquarters or regional office, as appropriate, for application deadlines.
Range of Approval/Disapproval Time
Generally, from 7 to 21 days depending on complexity of case and availability of resources.
Appeals
Reconsideration of a declined application can be requested within 6 months of the initial decline, and appealed within 30 days from the reconsideration decline.
Renewals
Additional information provided on SBA's website at sba.gov.
Assistance Considerations
Formula and Matching Requirements
This program has no statutory formula.
This program has no matching requirements.
This program does not have MOE requirements.
Length and Time Phasing of Assistance
Funds must be disbursed within six months of authorization of the loan, unless extended. See the following for information on how assistance is awarded/released: Additional information provided on SBA's website at sba.gov.
Post Assistance Requirements
Reports
Additional information provided on SBA's website at sba.gov. Additional information provided on SBA's website at sba.gov. Additional information provided on SBA's website at sba.gov. Additional information provided on SBA's website at sba.gov. Additional information provided on SBA's website at sba.gov.
Audits
In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133. Additional information provided on SBA's website at sba.gov.
Records
Complete financial records must be maintained by business borrower.
Program Accomplishments
Fiscal Year 2008: See the FY 2010 Performance and Accountability Report on SBA's website at sba.gov. Fiscal Year 2009: See the FY 2010 Performance and Accountability Report on SBA's website at sba.gov. Fiscal Year 2010: See the FY 2010 Performance and Accountability Report on SBA's website at sba.gov.
Financial Information
Account Identification
73-1152-0-1-453.
Obligations
(Salaries) FY 08 $260,496,000; FY 09 est $345,039,000; FY 10 est $242,071,000
Range and Average of Financial Assistance
Additional information provided on SBA's website at sba.gov.
Regulations, Guidelines and Literature
13 CFR Part 123; "Disaster Loans for Homes and Personal Property," DA-1: "Physical Disaster Business Loans," DA-2.
Related Programs
Not Applicable.
Information Contacts
Regional or Local Office
See Regional Agency Offices. For reference to the Disaster Area Office, see Appendix IV of the Catalog under the Small Business Administration.
Headquarters Office
David Lippold 409 3rd. Street, SW, Suite 6000, Washington, District of Columbia 20416 Email: david.lippold@sba.gov Phone: 202-205-6569
Web Site Address
Examples of Funded Projects
Not Applicable.
Criteria for Selecting Proposals
Not Applicable.
