Enhanced Support Measures Announced for SBA’s Disaster Loan Program



In an endeavor to better aid small businesses and disaster survivors, the Small Business Administration (SBA) has revealed sweeping changes to its disaster lending scheme. As of July 31, 2023, these modifications will be applicable to every federally declared disaster, focusing on providing more adaptable and cost-effective loans.

Isabella Casillas Guzman, the SBA Administrator, emphasized the institution’s determination to allocate maximum resources towards communities grappling with the escalating frequency of natural disasters, a consequence of climate change. Guzman mentioned, “By introducing these adjustments, we’re hoping to bolster recovery efforts of nonprofits, small businesses, homeowners, and renters, enabling their communities to regain their strength and vitality.”

Highlighting the transformative nature of the updates, Bailey DeVries, who serves dual roles as the associate administrator for both investment and innovation and capital access, mentioned that such alterations hadn’t been seen in close to thirty years. DeVries added, “By raising the limits of home disaster loans substantially, we aim to ensure communities possess ample funds to reconstruct and bounce back.”

Adding to this sentiment, Francisco Sánchez Jr., from SBA’s Office of Disaster Recovery and Resilience, expressed that these reforms are part of a broader strategy to revamp the SBA’s approach to disaster preparedness and response. This strategy seeks to invest more capital in rebuilding communities and amplifying resilience against impending calamities.

Noteworthy Amendments Comprise:

  • Elevated Loan Ceilings: Home disaster loans, earmarked for primary residences, have seen an increase, now capped at $500,000 from a previous $200,000. Meanwhile, personal property loan maximums have also witnessed a jump from $40,000 to a substantial $100,000.
  • Landscape Limit Abolished: The pre-existing $5,000 restriction on landscaping expenditures has been removed, now constrained only by the comprehensive real estate repair budget.
  • Lengthened Payment Grace Period: A shift from a 5-month to a 12-month initial payment deferment period for all disaster loans offers victims a longer cushion before commencing repayments.
  • Interest Reliefs: The first year’s interest from the primary disbursement date for all disaster loans will be nullified. This amendment assures that the payment hiatus provides tangible financial alleviation.
  • Augmented Mitigation Loans: Property proprietors can now utilize disaster loan capital to safeguard against a wider array of disasters, thanks to eased restrictions.
  • Collateral Stipulations: The SBA has chosen to forgo blanket liens on business commodities that don’t yield liquidity during potential defaults.
  • Streamlined Reconsideration Documentation: Enterprises are no longer mandated to furnish financial statements during every reconsideration or appeal for previously rejected submissions.
  • Broadened Eligibility: Now, consumer or marketing cooperatives can qualify for the Economic Injury Disaster Loan (EIDL) and Military Reservist Economic Injury Disaster Loan (MREIDL) schemes.

Guzman had previously, in 2022, opted to nullify the interest for the inaugural year and inherently prolong the primary payment deferment span to 12 months for disasters proclaimed between September 21, 2022, and September 30, 2023. These revisions are here to stay, extending their influence on all subsequent disaster loans post-September 30, 2023.

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