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SBA chief pitches low-cost loans for disaster victims

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Mayor Steve Benjamin looks on as Maria Contreras-Sweet, administrator of the U.S. Small Business Administration, talks to reporters about disaster loan programs available to businesses and non-profits. (Photo/Chuck Crumbo)
By Chuck Crumbo
ccrumbo@scbiznews.com
Published Oct. 22, 2015

Standing behind the flood-ravaged Title Max store near the bustling corner of Garners Ferry Road and Fort Jackson Boulevard, SBA chief Maria Contreras-Sweet said she was on a mission to “deliver capital” to local businesses that survived this month’s historic floods.

During a tour of the city on Wednesday, Contreras-Sweet made a pitch at a press conference about a number of low-cost loans offered by the U.S. Small Business Administration that are designed to help recovery efforts.

“I’m not here today to deliver platitudes,” Contreras-Sweet said. “I am here to deliver capital.”

The SBA, which had its first disaster team on S.C. soil less than 48 hours after President Obama’s disaster declaration, has received more than 1,600 loan applications and has approved 110 for a total of $2.5 million, Contreras-Sweet said.

“But we know there are a whole lot more folks out there and sometimes our pride holds us up,” she said. “I want people to know that the SBA is here for them at this time. They did not choose this situation. It came to them. And I want them to feel that we understand.”

Columbia Mayor Steve Benjamin, who joined Contreras-Sweet at the press event, said it’s important for flood victims – both businesses and individuals – to seek out resources available for disaster relief.

“We won’t have forever to avail ourselves to these resources,” Benjamin said. “Let’s take advantage of these resources while they’re here on the ground and paying attention to the people of Columbia.”

The injection of capital is key getting the local economy back on its feet after a disaster, Contreras-Sweet added.

“You have to see how quickly people are restored and brought back to business and working,” she said. “That will limit and sort of contain the situation. But to the extent people stop shopping and stop moving around then it begins to affect and grow, and that’s what we are trying to do.”

The SBA also is concentrating on offering smaller microloans “for all business that want to get an injection of capital,” Contreras-Sweet said.

The maximum limit for a microloan is $50,000; however, the average loan amount is $13,000, according to the SBA.

To apply for disaster relief, the business owner or non-profit must go directly to the SBA, Contreras-Sweet said.

“This is where the SBA is making loans directly,” she said. “There is no need to go to the bank.”

Loans not related to disaster relief can be handled through a local financial institution, said.

Here’s a quick look at SBA disaster relief programs:

  • Businesses and private nonprofit organizations of any size may borrow up to $2 million to repair or replace disaster damaged or destroyed real estate, machinery and equipment, inventory, and other business assets. The SBA may increase a loan up to 20% of the total amount of disaster damage to real estate and/or leasehold improvements, as verified by the SBA, to make improvements that lessen the risk of property damage by future disasters of the same kind.
  • For small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations, the SBA offers Economic Injury Disaster Loans to help meet working capital needs caused by the disaster. Economic Injury Disaster Loan assistance is available regardless of whether the business suffered any physical property damage.
  • Disaster loans up to $200,000 are available to homeowners to repair or replace disaster damaged or destroyed real estate. Homeowners and renters are eligible up to $40,000 to repair or replace disaster damaged or destroyed personal property.
  • Interest rates are as low as 4% for businesses and 2.625% for nonprofit organizations 1.875% for homeowners and renters with terms up to 30 years. Loan amounts and terms are set by the SBA and are based on each applicant’s financial condition.

For information on SBA disaster recovery loans call 800-659-2955/800-877-8339 TTY or go online to SBA.gov/disaster. An application for an SBA disaster recovery loan may be completed online at https://disasterloan.sba.gov/ela.

The deadline to apply is Dec. 4, Contreras-Sweet said.

“If you’re not sure you are qualified, come on in,” she said.

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