SBA Disaster Relief offering business loans to companies impacted by TN/GA/AL tornadoes

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The Small Business Administration has set up a disaster recovery center in Hamilton County at Southern Adventist University to assist companies negatively impacted by the severe storms and tornadoes.  Federal assistance in the form of low interest loans are being offered since parts of Tennessee/Georgia/Alabama were declared federal disaster areas. Two types of loans are being offered.

Physical Damage – Any business or private, nonprofit organization that is located in a declared disaster area and has incurred damage during the disaster may apply for a loan to help replace damaged property or restore it to the condition it was in before the disaster. If your business or private, nonprofit organization – large or small – has suffered physical damage as a result of a disaster, you may be eligible for financial assistance from the U.S. Small Business Administration. SBA makes physical disaster loans of up to $2 million to qualified businesses or private, nonprofit organizations. Covered items include: real property, machinery, equipment, fixtures, inventory, leasehold improvements.

Economic Injury Disaster – loans up to two million dollars for companies that may not have suffered physical damages, but still suffered economic losses because of loss of business, disruption of normal business activities (loss of electricity, cut off from suppliers, etc)

Businesses without lines of available credit that qualify will get a 4% interest loan whereas non-profits can qualify for a 3% interest rate. Loans can be made for up to 30 years.


Applying for an SBA Disaster Loan

Call the SBA at 800-659-2955

Apply online

Four disaster recovery centers have opened in Tennessee to help those whose homes or businesses were affected by recent storms and tornadoes in Bradley, Hamilton, Greene and Washington counties. The centers will be open from 8 a.m. to 8 p.m. local time seven days a week until further notice.

Bradley County
10 Church St.
Cleveland, Tenn. 37311

Hamilton County
Hulsey Wellness Centers (Southern Adventist University)
4870 University Drive
Collegedale, Tenn. 37363

Greene County
Camp Creek Elementary School
2941 Camp Creek Road.
Greeneville, Tenn. 37743

Washington County
125 East Jackson Blvd.
Suite 11B
Jonesborough, Tenn. 37659

Representatives from the Federal Emergency Management Agency, Tennessee Emergency Management Agency, U.S. Small Business Administration and other agencies will staff the centers to explain disaster assistance programs and help survivors apply. Recovery specialists also can help disaster survivors with referrals to other assistance programs.

Frequently Asked Questions

What information must I submit for a disaster loan?
Submit a completed loan application and a signed and dated IRS form 8821 giving permission for the IRS to provide the SBA your tax return information.

To process your application we need current financial information such as a personal financial statement, a current profit-and-loss statement, balance sheet and a list of debts.

Can I use the disaster loan to expand my business?
The disaster loan helps restore property to pre-disaster condition, and, under certain circumstances, protects the structure from future disasters. It cannot upgrade or expand a business unless required by local building codes.

I already have a mortgage on my business. Can the SBA refinance my mortgage?
The SBA can refinance all or part of a previous mortgage in some cases when the applicant does not have credit available elsewhere, has suffered uninsured damage (40 percent or more of the property value), and intends to repair the damage. SBA disaster loan officers can provide additional details.

How soon before I know I’ve been approved for a loan?
The sooner you return the completed loan application, the sooner the SBA can process it. The SBA tries to make a decision within 18 days. Make sure the application is complete. Missing information is a major cause of delays.

Is collateral required for these loans?
Physical loss loans over $14,000 and all EIDL loans over $5,000 must be secured to the extent possible. SBA will not decline a loan if there isn’t enough collateral, but requires you to pledge what is available. That usually consists of a first or second mortgage on the damaged business real estate, or best available if you don’t have real estate.

Should I wait for my insurance settlement before I file my loan application?
No. Don’t miss the filing deadline by waiting for an insurance settlement. Final insurance information can be added when a settlement is made. The SBA can approve a loan for the total replacement cost, but any insurance proceeds that duplicate SBA’s loan must be applied to your SBA loan.

How may I use an Economic Injury Disaster Loan?
The loan provides working capital for disaster-related needs until your business or private, non-profit organization recovers. You may request an EIDL for the amount of economic injury but not in excess of what your business or private, non-profit organization could have paid if the disaster had not occurred. EIDL loans cannot refinance longterm debts or provide working capital needed before the disaster. EIDL loans do not replace sales or lost profits.

Must I submit a personal financial statement with my loan application?
Yes. The SBA must review a financial statement for each owner and one for each partner, officer, director and stockholder with 20 percent or more ownership. The SBA requires the principals of the business to personally guarantee repayment of the loan, and in some instances to secure the loan by pledging additional collateral.


If you believe your business qualifies, don’t delay in applying. The application filing deadline for Physical Damage is June 30, 2011. The application filing deadline for Economic Damage is February 1, 2012


Jon is a Digital Marketing Strategist and Creative Media Specialist who has helped companies of all sizes with their marketing efforts. As a board member of the Chattanooga Technology Council, and is actively involved in covering the emerging business tech scene. Find him on Twitter @jonfmoss