Small Business Administration in Lynchburg to help tornado victims apply for low-interest loans

LYNCHBURG, Va. – David Childress is one of the many people from Elon who lost their homes in April's tornado. His wife and son were both hurt in the storm, but are now doing well.

"Life is getting back to some sense of normal. We have rented a house in (the) Elon area and we signed a contract this week to start building our new house," Childress said.

On Wednesday, Childress came to Central Virginia Community College to see what financial help he can get from the Small Business Administration.

"We're like a lot of the families in the Elon area, we have insurance but unfortunately, the insurance is not going to cover the complete cost to rebuild our home. So I wanted to find out how to potentially getting a loan here can help cover some of those gaps," Childress said.

At no cost, SBA is in Lynchburg, ready to help disaster victims such as homeowners, renters, and business owners from the Hill City, Amherst, Bedford and Campbell counties,apply for low-interest loans.

"We cover things insurance didn't cover, and even if you didn't apply for a low-interest loan and when your insurance pays, just pay the loan down and the net result is whatever you were compensated with," said, Kathy Cook, public affairs specialist for SBA.

SBA representatives say they can provide up to $200,000 to homeowners to cover home damage, landscape and debris removal, and the interest rate is as low as 1.813 percent.

"There's no obligation to take the loan if it's offered. There's no cost to apply. These loans are not through a bank. They're from a (the) U.S. Treasury," Cook said

"So it doesn't hurt to come talk to the staff here to see how they can help you," Childress said.

SBA will be at CVCC again 8 a.m. to 5 p.m. Thursday and from 8 a.m. to 4 p.m. Friday.

For more information on how to apply with the Small Business Administration, read information they've provided to 10 News below:

How to apply with SBA: 

Individuals and businesses affected by this disaster may submit a disaster loan application at the Disaster Loan Outreach Center at the Central Virginia Community College (CVCC), Main Campus Amherst Building, 3506 Wards Road, Lynchburg, VA 24502.

Another option is to go online by www.sba.gov/disaster. SBA’s Electronic Loan Application (ELA) is a speedy, user-friendly way for homeowners, renters and businesses to apply for a disaster loan.  The online program checks for errors, prompts for more information when needed and provides a quicker decision than the hand-written applications.  

Applications may be requested and mailed to you. 

Assistance can be obtained by calling the SBA Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard of hearing), or by sending an e-mail to disastercustomerservice@sba.gov. 
Paper applications may be downloaded from the SBA website: http://www.sba.gov/content/disaster-loan-paper-applications

Note: In conjunction with filling out an electronic loan application (ELA), applicants should download the IRS Tax Information Authorization, fill it out and submit it to SBA as soon as possible. This form is required regardless of tax status or income level of the applicant. This form is also required when filing paper applications. Processing cannot begin without it.

Businesses of all sizes and private nonprofit organizations may be eligible for up to $2 million to repair or replace disaster-damaged business assets such as buildings, inventory, furniture and fixtures, machinery and equipment, etc.

In addition, small businesses and most private nonprofits, regardless of whether they sustained physical damage but suffered economic losses due to the disaster, may also be eligible for SBA economic injury disaster loans (EIDLs).
These working capital loans up to $2 million provide funds for necessary and ongoing expenses until business returns to normal.
Homeowners are eligible up for to $200,000 to repair or replace disaster damaged real estate.
Homeowners and renters are eligible for loans up to $40,000, to repair or replace disaster damaged personal property such as clothing, furniture, appliances, cars, etc.
Loan Terms
The interest rates are as low as 3.305 percent for businesses, 2.5 percent for nonprofit organizations, and 1.75 percent 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.
The filing deadline to return applications for physical property damage is July 30, 2018; the deadline to return economic injury applications is March 4, 2019.

The criteria for getting a disaster loan is:
Must be in a declared area.
Must have satisfactory credit.
Must have repayment ability.
More about disaster loans:
Generally, the loan amount equals the losses (as estimated by SBA) minus any insurance or grants for repairs or replacements (or business interruption).
There is no cost to apply.
There is no obligation to take the loan if offered.

Applicants can elect to borrow any amount up to the full loan amount.

Collateral is required for physical loss loans over $25,000, and for all Economic Injury Disaster Loans (EIDLs) over $25,000.

Mitigation:

Applicants may be eligible for a loan amount increase of up to 20 percent of their physical damages, as verified by the SBA for mitigation purposes. Eligible mitigation improvements may include a safe room or storm shelter, elevation, relocating utilities, etc.

Why Apply?

If homeowners or renters are referred to SBA they should submit their SBA disaster home loan applications (preferably electronically) as soon as possible to begin the recovery process.

There is no obligation to take an SBA disaster loan if it is offered, but it is important to submit an application before the deadline.

If the loan is declined, applicants are given up to six months from the date of the decline letter in which to seek reconsideration.

Rental property:

Owners of rental properties are considered a business and can apply for both SBA physical disaster loan funds and economic injury disaster loan funds.

About insurance:

Disaster applicants should not wait to settle with their insurance company before applying for disaster loan assistance. If a survivor does not know how much of their loss will be covered by insurance or other sources, or would like to begin rebuilding and repairs prior to receiving insurance funds, SBA will consider making a low interest disaster loan for the total loss up to its loan limits, provided the survivor agrees to use insurance proceeds to reduce or repay their loan.

Mandatory payoff:

If a lienholder requires that the insurance proceeds be applied toward the lien balance, and will verify that they made this requirement (preferably in writing), then SBA will only reduce the loan by the amount of insurance remaining. This is not true for car payoffs. Survivors should not voluntarily pay off their mortgage with their insurance check.

Disbursement process:

Once an applicant has been approved, SBA will send loan closing documents with the terms and conditions.

Usually, SBA can disburse the first $25,000 once the required closing documents for an unsecured loan have been submitted.

Loans must be secured with collateral and other requirements must be met prior to disbursements in excess of the unsecured loan amounts.

The disbursement process is similar to a construction loan and is made in installments as repairs are being completed.

Free services for business loan applicants:

SBA does not require applicants to hire the services of a professional to complete their disaster loan application. SBA staff can assist individuals in completing their disaster loan application forms at no cost.

Counselors are available to help businesses prepare financial statements and complete their application package at no cost.

Small Business Development Centers (SBDCs) Small business owners and aspiring entrepreneurs can go to their local SBDCs for free, face-to-face business consulting and at-cost training on writing business plans, accessing capital, marketing, regulatory compliance, international trade and more. 
Main webpage: http://asbdc-us.org/ 

SBA’s Women's Business Centers (WBC) provide entrepreneurs (especially women who are economically or socially disadvantaged) comprehensive training, counseling and technical assistance. Main webpage: http://www.sba.gov/content/women%E2%80%99s-business-centers

SCORE: Mentors deliver free, confidential, valuable advice for business needs. Main webpage: http://www.score.org/mentors