MO SBTDC offers help in accessing SBA disaster assistance loans

In response to the heavy rains and widespread flooding that have afflicted many Missouri communities, Missouri Gov. Eric Greitens has declared a state of emergency, and the Missouri state treasurer Eric Schmitt activated a disaster relief program.

And for affected businesses, the Missouri Small Business & Technology Development Centers (MO SBTDC) has released the following disaster assistance guidelines and stands ready to assist business owners in accessing the resources they need to recover and rebuild.

SBA loans. The U.S. Small Business Administration (SBA) provides low-interest disaster loans up to $2 million to businesses of all sizes, private non-profit organizations, homeowners and renters. SBA disaster loans can be used to repair or replace the following items damaged or destroyed in a declared disaster: real estate, personal property, machinery and equipment, inventory and business assets. SBA will also often set up service centers near the disaster.

“Flood damage can be a significant setback for many small businesses,” said Greg Tucker, state director of the MO SBTDC. “The business counselors of the MO SBTDC located statewide are acutely aware of the damage caused by the recent flooding and are standing by to assist in any way possible to affordably finance water removal, restoration and reconstruction.”

The SBA has two types of disaster loans -- Economic Injury and Business Physical Disaster Loans. Business Physical Disaster Loans are only available if the president or SBA has declared a disaster, which has not yet occurred as of this writing.

SBA Economic Injury Disaster Loans. If you are a small business, small agricultural cooperative or private nonprofit organization that has suffered substantial economic injury, you may be eligible for an SBA Economic Injury Disaster Loan (EIDL) up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred.

Your loan amount will be based on your actual economic injury and your financial needs, regardless of whether your business suffered any property damage. Interest rate on EIDLs will not exceed 4 percent per year, and the term of a loan will not exceed 30 years. Repayment terms will be determined by your ability to repay the loan. EIDL assistance is available only to small businesses when SBA determines they are unable to obtain credit elsewhere.

Missouri loans. The state treasurer activated the Harmed-area Emergency Loan Priority system, or HELP, a disaster relief program for Missouri small businesses and farms impacted by flooding on April 29 and April 30, 2017. HELP is administered through the Missouri Linked Deposit Program. Small businesses with up to 99 employees are eligible to receive a loan through about 115 lenders with 350 branches throughout Missouri. Find a list of participating lenders and program eligibility guidelines at www.treasurer.mo.gov/linkeddeposit.

Here are a few other helpful tips:

• These loans are true loans, not grants, with all the terms, due diligence and other requirements of any other loan.

• Standard loan credit and lending standards also still apply.

• Your loss should be fully documented, ideally with pictures. Before and after pictures will also help you better tell your story and allow you to more easily rebuild.

• You will need financial records and projections to prove you can carry the debt service of the disaster loan.

• The SBA may ask for your home as collateral. The value of your business is probably not at its highest after a flood, and SBA may be stricter on collateral requirements.

For more information or to apply for a disaster loan, please contact a MO SBTDC office near you. https://missouribusiness.net/centers