Small business loan options post-Hurricane Ian

At SmartBiz®, we recognize that small businesses are the backbone of America. Recently, entrepreneurs in Southwest Florida faced an unbelievable challenge that is still disrupting business operations and leading to significant financial losses.

For those impacted by Hurricane Ian, we’re sharing information on post-hurricane resources that may be helpful. When small businesses are healthy, the community and the overall economy benefit.

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SBA disaster relief programs

The SBA stands ready to help those in declared emergency zones with low-interest loans and other programs. Available emergency loans are funded directly through the SBA and are designed to help businesses get back on their feet. SBA disaster relief programs are available for business owners and others. Here is a list of some programs currently available:

Physical damage loan

Although the SBA is known for supporting small business owners, a physical damage loan may also help those who do not own a business. Low interest loans are available to businesses, nonprofit organizations, homeowners, and renters located in regions affected by declared disasters. To qualify, you must live in a declared disaster area during the specific time of the disaster. The SBA has made it easy to determine if you live in a declared disaster area. Create an account and apply for assistance via the official SBA application here.

Economic Injury Disaster Loans (EIDL)

The Economic Injury Disaster Loan program (EIDL) is part of the SBA Disaster Loan program. EIDL loans are low-interest, long-term loans that are available to qualified businesses affected by natural disasters, such as hurricanes and floods. Note that EIDL assistance is available only to small businesses when SBA determines they are unable to obtain credit elsewhere. Businesses may qualify for both an EIDL and a physical disaster loan. The SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. Apply online and be prepared to upload a signed and dated IRS Form 4506-T to give permission for the IRS to provide SBA with your tax return information.

Military Reservist Economic Injury Disaster Loan (MREIDL)

Do you employ military reservists? If so, those employees may be called to duty when disaster strikes. Because that can leave you understaffed and struggling, the SBA has created the Military Reservist Economic Injury Disaster Loan (MREIDL), a program to offset financial impact.

The interest rate for these loans is 4% with a term of up to 30 years, depending on a business’ ability to repay the loan.

There are no prepayment penalties or fees and collateral is required for all MREIDL loans which are greater than $50,000.

The filing period begins on the date the essential employee receives a notice of expected call-up and ends one year after the essential employee is discharged or released from active duty. Learn more from the SBA here: MREIDL Eligibility.

Additional resources

Of course, before disaster strikes, it’s important to have a plan. It may sound overwhelming, but there are free, online resources to help you get organized and cover the important aspects of emergency preparedness. For example, FEMA created a hurricane preparedness toolkit, which is a good place to start. The kit helps business owners identify their risk, develop a plan, and outline the steps necessary to take action. There’s even a section on how to inspire others in your community to stay safe.

Another strategy to help you maintain operations or rebuild is to secure a line of credit for your  business. A line of credit is a revolving loan, like a credit card, that a business owner can draw upon as needed and only pay interest on what they use. For a temporary dip in inflows and stagnant expenses, a line of credit can help make all the difference and may allow for a necessary pivot with less stress.

Before, during, and after a disaster, SmartBiz is here to help small business owners get the funding they need. Additionally, the SmartBiz Resource Center has information on the economy, credit, financing, marketing, employee management, and more. Visit the business stories section to read inspiring stories about other business owners who are surviving and thriving.

Hurricane Ian was one of the most powerful storms to strike the U.S. in decades, with terrible winds, storm surge, rain, and flooding. We wish anyone impacted by the storm a full and fast recovery.

WHAT YOU NEED TO KNOW: The SmartBiz® Small Business Blog and other related communications from SmartBiz Loans® are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. Please consult legal and financial processionals for further information.

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