SBA offers economic injury, disaster aid

But the U.S. Small Business Administration is issuing a reminder to businesses that suffered property damage or economic injury from severe storms and tornadoes that tore their way through Springfield and surrounding cities Jan. 7–10.

SBA is still accepting applications for businesses in Greene, Christian, Webster, Dallas, Laclede, Wright and Douglas counties that may need a low-interest loan for up to $1.5 million to repair or replace real estate, machinery or equipment damaged in the storm. SBA loans for property damage are available to businesses of any size as well as churches, charities and private universities, but the application deadline is May 2.

SBA also has loans available for small businesses and small-agricultural cooperatives that sustained economic injury from the storm. Those businesses are eligible for up to $1.5 million in working capital to help cover normal obligations until normal operations resume. The deadline for these so-called economic injury loans is not until Dec. 3, because financial harm caused by a natural disaster may not be realized for several months, said Phil Duncan, an SBA spokesman based at the Sacramento, Calif., Office of Disaster Assistance.

“Typically, an economic injury tends to show up further down the line,” he said.

The loans were made available after SBA approved Gov. Matt Blunt’s request for disaster assistance in early March.

“The tornado damage in these counties was devastating for many families and small-business owners,” Blunt said in a news release. “In addition to their losses, they have experienced the unexpected costs of clean-up, debris removal and other recovery expenses.”

Duncan reiterated that physical damage is not a prerequisite for an SBA disaster loan. A year-to-date comparison of financial statements can be used to substantiate a company’s claim that a disaster caused a significant revenue loss, Duncan added.

“Let’s say I own a dry-cleaning establishment and I’m on the edge of the tornado, and it didn’t physically hurt my business but my customer base was in the path of the tornado,” he said. “That’s clearly going to cause an economic injury to my business if my customers’ clothes are in the next county.”

As of March 19, SBA had issued only one loan application to a business in conjunction with the January tornadoes, Duncan said.

“We hope that’s indicative that most people were just well-insured and have not suffered losses beyond their insurance, which is a good thing,” he said, noting that the single loan application SBA issued had not yet been returned.

A business may apply for both types of SBA disaster loans. The typical loan is structured with a 4 percent fixed interest rate over 30 years, but Duncan said the terms could be modified, depending on an applicant’s ability to repay the loan.

“We have the same fiduciary responsibility that a bank has,” he said. “These are loans, and the taxpayers expect to be repaid.”

Duncan said the SBA has been in touch with Missouri officials regarding the March 18 flooding and is anticipating another request from Blunt for disaster assistance.

Disaster Loan Inquires

To request an SBA disaster loan application for losses associated with the January storms, call (800) 659-2955 or visit Webster County 911 Administrative Services at 565 South Prairie Lane in Marshfield. An SBA customer-service representative will be at the Marshfield location April 15–May 2, to handle inquiries. The office will be staffed weekdays 9 a.m.–6 p.m.[[In-content Ad]]