7 Tips To Get An SBA Disaster Loan – Even If You Have Bad Credit

Your home has been hit by disaster and you’re looking to rebuild, but it turns out that your insurance won’t cover everything and you can’t come up with the full cost of rebuilding on your own. What do you do? There’s help available – the U.S. Small Business Administration (SBA) has loan programs specifically designed to help people in exactly this situation, called SBA Disaster Loans.

1) Don’t Wait Too Long;

There are two reasons why you shouldn’t wait too long to apply for an SBA loan: it can take a long time to get approval and you might run out of money. The first problem is that it can take weeks or even months to get your application approved. The good news is, as long as you have some cash on hand, it’s possible to tide yourself over without taking on new debt by using credit cards or lines of credit. These lines aren’t ideal, but they won’t create further financial issues if your loan application doesn’t come through in time and you need more help getting back on your feet.

2) Take Pictures Of Everything;

Document your damage as thoroughly as possible with photos. Be sure to include close-ups and wide shots, as well as items of value (and worthless items). While FEMA offers grants and loans to cover damages not reimbursed by insurance, SBA loan requirements are often more forgiving. The process for acquiring an SBA disaster loan is very similar to that of obtaining a business loan—you have to provide a personal financial statement and start-up documentation, at which point you’ll know whether or not you qualify for assistance from the federal government. Don’t put off taking action because of fear; FEMA estimates that only 36% of businesses impacted by natural disasters will apply for aid.

3) Stay Organized;

Before applying for an SBA loan, make sure you have your finances in order and that your business is properly documented. Insurance is important when running a small business, so start by identifying all of your assets and insuring them against flood or fire damage. And it never hurts to have more capital on hand than necessary; while a maximum loan amount is usually set, there’s no limit to how much money you can put up as collateral. The last thing you want after facing a disaster or other hardship is a pile of bills or accounts that haven’t been paid on time.

4) Know Your Numbers;

The first step in getting an SBA disaster loan is to find out how much money you’ll need. A good way to do that is by calculating your overall business losses and insurance deductible (in case you have any). Be sure to include: lost income, cost of goods, inventory loss, clean-up costs and any other immediate expenses. Once you have a rough estimate of your total losses, know that you may only be able to cover up to half of those costs with an SBA loan. And it’s okay if you can’t cover everything—you can still apply for an SBA disaster loan and rebuild over time by saving as much as possible before starting a new business.

5) Go Through The Proper Channels;

The Small Business Administration (SBA) is authorized to provide low-interest loans to companies and individuals after a disaster strikes. However, getting an SBA loan can be more challenging than you think. For example, lenders typically require borrowers to have collateral or assets of equal value in order to secure a loan. So if your business is wiped out by a disaster, it’s unlikely that your bank will offer you money. But there are ways around it, as long as you go through all of the proper channels first and put forth an effort to get one of these loans. Here are seven tips that every borrower should keep in mind when applying for an SBA loan

6) Visit The Small Business Administration Website;

This site is where you’ll find loan programs, disaster assistance information and free business tools. While there are a lot of useful things on their site, it can be hard to figure out what to do if you are suffering from a specific problem—especially if you’re in crisis mode. For example, when I was trying to set up my business after Hurricane Irma, I wanted to know more about how to apply for an SBA loan. Instead of scrolling through their pages endlessly or calling them, I found their Contact Us page and sent them an email asking for help; they got back with me immediately! They pointed me to exactly what I needed to get started: How Do I Apply for an SBA Loan? Step-by-Step Guide. It had all of the answers I needed, like loan amounts available by state and county, who is eligible for loans and application requirements. The SBA staff even helped connect me with a local lender that matched my needs! It’s these kind of quick wins that can make a huge difference in your day-to-day stress level as you recover from any kind of crisis situation.

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7) Keep A Positive Attitude;

When disaster strikes, it can be easy to lose hope. Insurance companies may not give you your due and loans might seem impossible to come by. But keep your chin up—the Small Business Administration is here to help. That’s right: Thanks to a 2009 law, loans are now available for small businesses who’ve been affected by an event like Hurricane Sandy. The bottom line: Take advantage of every resource that comes your way and apply for an SBA loan today!