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HomeMy WebLinkAbout2006-06-26 Correspondence ~B~ DISASTER NEWS em! t<~4 U.S. Small Business Administration Loans for Homeowners, Renters and Businesses of All Sizes Contact: Richard A. Jenkins Phone: (916) 735-1500 Release Date: June 22, 2006 Release Number: IA 10505 - I SBA Declares Disaster in Johnson County Sacramento, CA - Hector V. Barreto, Administrator of the U.S. Small Business Administration (SBA), today declared Johnson County and the neighboring counties of Benton, Cedar, Iowa, Linn, Louisa, Muscatine and Washington a disaster area due to damage caused by tornadoes and severe storms on April 13 and 14,2006. Following the June 16 denial of the state's request for a major disaster declaration, SBA acted under its own authority to declare these counties a disaster area. According to Joseph M. Folsom, SBA's Iowa District Director, low-interest Federal disaster loans are available to homeowners, renters, businesses of all sizes and private, non-profit organizations whose property was damaged or destroyed by the tornadoes and severe storms. "SBA Customer Service Representatives will be on hand at the following SBA Disaster Outreach Center to issue loan applications, answer questions about SBA's disaster loan program, explain the application process and help each individual complete their application," Folsom said. The center will be open on the following days and times: Iowa City County Administration Building 9I:i S. Dubuque Street Tuesdays through Fridays, 8:30 am - 6 pm Saturdays, 10 am - 2 pm Beginning Tuesday, June 27'h through Saturday, July 15'h Closed on July 4 "Disaster loans up to $200,000 are available to homeowners to repair or replace damaged or destroyed real estate. Homeowners and renters are eligible for up to $40,000 to repair or replace damaged or destroyed personal property," said Folsom. "Businesses of any size and private non-profit organizations may borrow up to $1.5 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory, and other business assets. SBA can also lend additional funds to help with the cost of making improvements that protect, prevent or minimize the same type of disaster damage from occurring in the future. In addition, for small businesses only, SBA offers Economic Injury Disaster Loans (EIDLs) to help meet working capital needs caused by the disaster. EIDL assistance is available regardless of whether the business suffered any property damage," Folsom added. Individuals and businesses unable to visit SBA in person may obtain information and loan applications by calling toU-free (800) 659-2955. Hearing impaired individuals may call (800) 877-8339. Completed applications may be mailed to SBA at 14925 Kingsport Road, Ft. Worth, TX 76155. The filing deadline to return applications for property damage is August 21,2006. The deadline to return economic injury applications is March 22, 2007. For more information visit SBA's website at www.sba.gov/disaster. ### Field Operations Center - West - P.O. Box 419004 - Sacramento, CA 95841 I i i , I I I The U. S. Small Business Administration (SBA) is offering low-interest disaster loans to homeowners, renters, and non-farm I I businesses of all sizes who suffered losses caused by the severe storms and tornadoes that occurred April 13 & 14, 2006. Types of loans available are: I , Individuals and Families: i i Homeowners: up to $200,000 to repair or replace real estate damage and up to $40,000 to replace personal property. I Renters: up to $40,000 to repair or replace personal property. Businesses: Property Damage: up to $1,500,000 to repair or replace real estate, machinery and equipment, inventory and other assets that were damaged or destroyed (available to businesses of any size and private, non-profit organizations). Economic Injury: only for small businesses suffering adverse financial impacts of the disaster (with or without property loss), up to $1,500,000 for working capital to help pay obligations until normal operations resume. SBA loan officers will be at the following location(s) to meet with each disaster victim. SBA will answer specific questions about how a disaster loan may help each victim recover from the disaster damage, and will provide one-on-one assistance in completing applications for these loans. IOWA CITY SBA Outreach Center Johnson County Administration Building 913 S. Dubuque Street (Intersection of S. Dubuque Street & E. Benton Street) Tuesdays through Fridays, 8:30 am to 6:00 pm; I Saturdays, 10:00 am to 2:00 pm Open: Tuesday, June 27th through Saturday, July 15th ! Closed for holiday: Tuesday, July 4th For more information, please call the SBA toll-free number: (800) 659-2955 ~B~ u.s. SMALL BUSINESS ADMINISTRATION DISASTER LOANS. FACT SHEET U.s. SmaR Iv...... AdmJnlltrallon Incident: Severe Storms and Tornadoes Disaster: IA-00004 Declaration: 10505/10506 Occurring: Aorl/13 throuah Aori114. 2006 Johnson County, Iowa and the contiguous counties of: Benton, Cedar, Iowa, Linn, Louisa, Muscatine & Washington Aoolication Fillna Deadlines: Physical Damage: Auaust 21.2006 Economic Injury: March 22. 2007 Whether you rent or own your own home, own your own business, or own a small agricultural cooperative located in a declared disaster area, and are the victim of a disaster, you may be eligible for financial assistance from the U. S. Small Business Administration (SBA). What TVDes of Disaster Loans are Available? . Home Disaster Loans - Loans to homeowners or renters to repair or replace disaster damaged real estate or personal property owned by the victim. Renters are eligible for their personal property losses, including automobiles. . Business Phvsical Disaster Loans - Loans to businesses to repair or replace disaster-damaged property owned by the business, including real estate, inventories, supplies, machinery and equipment. Businesses of any size are eligible. Non- profit organizations such as charities, churches, private universities, etc., are also eligible. . Economic Iniurv Disaster Loans (EIDLl - Loans for working capital to small businesses and small agricultural cooperatives to assist them through the disaster recovery period. EIDL assistance is only available to applicants and their owners who cannot provide for their own recovery from non-government sources. Farmers, ranchers, nurseries, religious and non-profit organizations are not eligible for an EIDL. What are Mltlaatlon Loans? If your loan application is approved, you may be eligible for additional funds to cover the cost of improvements that will protect your property against future damage. Examples of improvements include retaining walls, seawalls, sump pumps, etc. Mitigation loan money would be in addition to the amount of the approved loan, but may not exceed 20 percent of the approved loan amount. It is not necessary for the description of improvements and cost estimates to be submitted with the application. SBA approval of the mitigating measures will be required before any loan increase. What are the Credit Reaulrements? . Credit Historv - Applicants must have a credit history acceptable to SBA. . Repavment - Applicants must show the ability to repay all loans. . Collateral- Collateral is required for physical loss loans over $10,000 and all EIDL loans over $5,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but requires you to pledge what is available. What are the Interest Rates? By law, the interest rates depend on whether each applicant has Credil Available Elsewhere. An applicant does not have Credil Available Elsewhere when SBA determines the applicant does not have sufficient funds or other resources, or the ability to borrow from non-government sources, to provide for its own disaster recovery. An applicant, which SBA determines to have the ability to provide for his or her own recovery is deemed to have Credit Available Elsewhere. Interest rates are fixed for the term of the loan, are determined by formulas set by law, and may vary from disaster to disaster with market conditions. Currently (for disasters which occurred on or after January 30, 2006) the applicable interest rates are: No Credit Available Elsewhere Credit Available Elsewhere Home Loans Business Loans Non-Profit Organizations Economic Injury Loans 2.875% 4.000% 4.000% 4.000% 5.750% 7.408% 5.000% N/A What are Loan Tenns? The maximum tenn is 30 years. However, the law restricts businesses with credit available elsewhere to a maximum 3-years tenn. SBA sets the Installment payment amount and corresponding maturity based upon each borrower's ability to repay. What are the Loan Amount Lllnlts? . Home Loans - SBA regulations limit home loans to $200,000 for the repair or replacement of real estate and $40,000 to repair or replace personal property. Subject to these maximums, loan amounts cannot exceed the verified uninsured disaster loss. . Business Loans - The law limits business loans to $1,500,000 for the repair or replacement of real estate, inventories, machinery, equipment and all other physical losses. Subject to this maximum, loan amounts cannot exceed the verified uninsured disaster loss. . Economic Iniury Disaster Loans IEIDLl - The law limits EIDL(s) to $1,500,000 for alleviating economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by program standards, less business interruption insurance and other recoveries up to the administrative lending limit. SBA also considers potential contributions that are available from the business andlor its owner(s) or affiliates. . Business Loan CeilinQ - The $1,500,000 statutory limit for business loans applies to the combination of physical and economic injury, and applies to all disaster loans to a business and its affiliates for each disaster. If a business is a major source of employment, SBA has the authority to waive the $1,500,000 statutory limit. What Restrictions are there on Loan EIIQlbilitv? . Uninsured Losses - Only uninsured or otherwise uncompensated disaster losses are eligible. Any insurance proceeds which are required to be applied against outstanding mortgages are not available to fund disaster repairs and do not reduce loan eligibility. However, any insurance proceeds voluntarily applied to any outstanding mortgages do reduce loan eligibility. . IneliQible Prooertv - Secondary homes, personal pleasure boats, airplanes, recreational vehicles and similar property are not eligible, unless used for business purposes. Property such as antiques and collections are eligible only to the extent of their functional value. Amounts for landscaping, swimming pools, etc., are limited. . Noncomoliance - Applicants who have not complied with the tenns of previous SBA loans are not eligible. This includes borrowers who did not maintain flood andlor hazard insurance on previous SBA or Federally Insured loans. Is There Helo Available for RefinancinQ? . SBA can refinance all or part of prior mortgages that are evidenced by a recorded lien, when the applicant (1) does not have credit available elsewihere, (2) has suffered substantial uncompensated disaster damage (40 percent or more of the value of the property), and (3) intends to repair the damage. . Homes - Homeowners may be eligible for the refinancing of existing liens or mortgages on homes, in some cases up to the amount of the loan for real estate repair or replacement. . Businesses - Business owners may be eligible for the refinancing of existing mortgages or liens on real estate, machinery and equipment, in some cases up to the amount of the loan for the repair or replacement of real estate, machinery, and equipment. What if I Decide to Relocate? You may use your SBA disaster loan to relocate. The amount of the relocation loan depends on whether you relocate voluntarily or involuntarily. If you are interested in relocation, an SBA representative can provide you with more details on your specific situation. Are There Insurance Requirements for Loans? To protect each borrower and the Agency, SBA may require you to obtain and maintain appropriate insurance. By law, borrowers whose damaged or collateral property is located in a special flood hazard area must purchase and maintain flood insurance for the full insurable value of the property for the life of the loan. For More Information Contact: SBA Disaster Assistance Customer Service Center 1-800-659-2955 http://www.sba.qov/disaster