Steps to Acquire a Small Business Disaster Loan

Steps to Acquire a Small Business Disaster Loan
  • Opening Intro -

    When a disaster hits, residential, commercial and retail properties alike may be damaged or destroyed.

    If you own a small business your company may have been affected.


Without quick remedy, your business may be gone for good as disaster losses keep you from restarting your enterprise. Fortunately, when the president of the United States declares a disaster area, affected businesses can seek relief through a federal disaster loan program. Such low-interest rate loans go beyond your insurance settlement and must be paid back, but they may also save your business from the disaster of going under.

1. Apply online. The fastest way to obtain disaster loan funds is to fill out and submit your application online. Contact your insurance agent first to get that claim going and then log on to the Small Business Administration website at to fill out your application. Along with your loan application you need to sign and date IRS Form 8821, what gives the IRS permission to share with the SBA your tax return details. Alternately, you can apply by US mail.

2. Assemble your information. It is always an excellent idea for small business owners to keep copies of their important information away from the business’ premises. If that information is destroyed, it will take you longer to file your application. The information required by the SBA is quite detailed and includes your contact information, your Social Security Number, the applicable FEMA registration and your deed or leasing information. The FEMA number can be obtained by calling 1-800-621-3362. You will also be asked to provide your insurance information, your Employer Identification Number and financial information, including your cash flow statement, profit and loss and related statements.

3. Check your application status. Your disaster loan application will be processed in the order that it is received. To check on its status, you can visit and key in your user identification, password and your personal identification number to sign in. Once logged in, you will learn the loan’s status and, if approved, how to obtain your funds. Those funds can be used to cover both property loss and the loss of economic activity. Loan amounts of up to $2 million are available.

4. Use your loan proceeds. You can begin using your small business disaster loan as soon as the money is deposited into your account. You might also work with local disaster relief teams to find a new business location if yours has been destroyed and to get that new location ready for you to resume your business operation. Your funds may also be used to pay employees who might not be eligible for unemployment benefits. Work with local, state and federal agencies as well as volunteer organizations such as the Red Cross and the Salvation Army that are available to assist you. With time being of the essence, you need to get back in business as quickly as possible. Tap all available and applicable resources to help your business get back on its feet again.

5. Pay back your loan. The SBA will provide loan term information with interest rates set no higher than 8 percent for businesses that can obtain credit elsewhere. That rate is no higher than 4 percent for businesses that cannot obtain credit elsewhere. Loan terms are up to 30 years and depend on your ability to repay the loan. Payment can be made online through an automated clearing house (ACH) withdrawal from your checking account or by a credit card payment. The online form will list your name, full address, your SBA loan number and your payment amount.

Plan Ahead

Few of us can wrap our minds around an unseen disaster. However, that is the visionary thinking that all successful small business owners must employ. Before a disaster hits is when you should get organized by reviewing your current insurance information and by keeping copies of your important business records in a safe place.

Create a business impact analysis (BIA) to outline how a disaster would affect your business. A preparedness plan should also be put in place, one that outlines how you will respond in an emergency, by contacting senior management, employees, clients, customers and other affected parties. Finally, evaluate and test your plan by conducting exercises to determine its effectiveness, fine-tuning your plan until you have it right.

Author Information

Kelley Palmer is a professional blogger that shares information and news on after school programs and child care. She writes for The Learning Experience, a leading child development center with locations nationwide.



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