Running a business is no easy task. At some point in the life cycle of most businesses, the owners will be seeking startup capital or working capital. According to the U.S. Small Business Association, small businesses borrow for four principal reasons: 1) starting a business; 2) purchasing inventory; 3) expanding the business; and 4) strengthening the firm. Hurricanes, tornadoes, flooding and other natural disasters can wreak havoc on an otherwise thoughtful business plan.
If you run a business in an area that is a declared disaster area, you will likely be seeking assistance in recovering from your losses. The Small Business Administration (SBA) allows businesses of all sizes and most nonprofit organizations to apply for a loan to recover after a disaster. To be eligible for SBA disaster assistance loans, you must be located in a declared disaster area and have suffered physical damage.
You will be required to give evidence of the physical damage before your loan can be approved. Also, in order for the loans to be approved, the applicants must show a reasonable ability to repay the loan plus other obligations from company earnings.
If you cannot obtain a loan elsewhere, the loan will be offered at an interest rate not exceeding 4 percent. For businesses and nonprofit organizations that are capable of obtaining credit elsewhere, the loan will be offered at an interest rate not exceeding 8 percent. It is the responsibility of the SBA to determine whether the applicant can obtain credit elsewhere, before they can approve them according for Business Physical Disaster Loans. Depending on your company’s ability to repay the loan, the repayment period can go to a maximum of 30 years.
For the application process, you will require to submit a completed application form and a signed and dated IRS form 8821 which gives the IRS permission to supply the SBA with details of your tax returns. The application can be made online on SBA’s secure website.
Companies who are seeking bad credit business loans or a business cash advance may find the SBA loan approval process too lengthy for immediate funding needs. If you are searching for how to find working capital after a natural disaster, lending companies have worked with small businesses all over the United States to provide working capital and secured and unsecured funding options.
The desire to own and operate a business is one that is shared by many people. Unfortunately, when physical losses occur to a business, the unforeseen recovery expenses can be very high. The good news is that even if you have been hit by a disaster, you can recover from it. Business physical disaster loans offer a lifeline to companies struggling to rebuild their small business.