SBA isn't just for businesses
Pago Pago, AMERICAN SAMOA — The US Small Business Administration “is not just for businesses,” following a disaster because it provides disaster programs for not only business owners, but homeowners, and private non-profit and renters as well, said SBA public information officer Yolanda Stokes, who is working with a team of 15 SBA representatives at the joint Disaster Recovery Center (DRC) inside the DYWA Pago Pago Community Youth Center.
Stokes, who has been on the ground for a few days, encourages “our disaster survivors” from Tropical Storm Gita to “take advantage of all programs” both through FEMA grant programs and SBA disaster assistance loan programs for homeowners, renters, private non-profit, churches, and businesses of all sizes.
In a Samoa News interview yesterday, Stokes explained that SBA provides low interest disaster loans. For home loans, the interest rate can be as low as 1.8% for homeowners and renters. For private nonprofits, the rate is as low as 2.5% and then 3.58% for business owners.
The amount can go up to $200,000 for homeowners claiming their primary residence at the time of Gita.
“It can’t be for their vacation home, or second home,” she said.
There is another loan program — up to $40,000 for damage to the contents of the home, such as clothing, furniture, appliances and even their automobile — if it was damaged because of Gita.
For renters, they are eligible for up to $40,000 for their personal possessions including clothing, appliances and furniture, and their vehicle — if damaged by Gita.
Business and private non-profits can loan up to $2 million, which can be for structural damage or business assets such as machinery, equipment, and inventory.
SBA also has “working capital loans” for “businesses that may not have had physical damage, but they had more ‘nonphysical damage’ — meaning that maybe the power was out, or their customers couldn’t get to them. And so they’re not able to pay their bills or pay their employees, and they need income,” Stokes explained.
When asked how a business owner can justify a working capital loan, Stokes responded, “We would work with that business owner to try to establish where they were, prior to Gita. Maybe about this time of year — during the same period last year — where their income levels were. And then we’ll help them create working capital to sustain them for the next few months.”
“So anyone that applies for a business loan, their loan officer will consider them for both — physical losses and if they have working capital needs,” she continued. “We’ll take care of them as far as determining whether they have a need for either or. And that loan can go up to $2 million.”
REGISTER WITH FEMA FIRST
Stokes further explained, "We want people to understand that it’s important that they first register with FEMA, because that’s pretty much the gateway to all disaster programs. The registration with FEMA is very, very important.”
And if FEMA refers them over to SBA, “We want them to go ahead and complete the application process. Sometimes people tend to think — ‘well, I don’t want a government loan, or I might not be eligible’,” she said.
“But we’ll take a look at what their situation is. And if they’re not eligible based on — maybe they have limited income — then we will refer them back to FEMA for FEMA’s Other Needs program,” she pointed out.
“So FEMA will want to see that they’ve completed the process, they’ve gone to SBA, and if we’re able to approve a loan for them, or at least work towards an approval, then they can continue the process,” Stokes explained.
“But if we do a preliminary screening and we see where the loan would create a hardship, then we would refer them back to FEMA for the Other Needs program. And that might be a better fit for some people to get that [FEMA] grant program, but they must complete the full process,” she continued.
Stokes again emphasized, “it’s important they complete the whole process, because we don’t want them to miss out on eligibility for any other program."
According to the SBA official, the federal agency representatives are at the DRC from 8a.m. to 4pm Monday to Saturday, along with adequate staff from FEMA to assist everyone who was affected by the storm.
At the DRC, SBA representatives will provide one-on-one sessions with applicants. “We can help them complete the loan application and answer questions on how the program may help them,” Stokes said. “We will provide that face-to-face assistance with adequate staff there to meet with our disaster survivors.”
If the applicant has financial statements, Stokes said they can bring them at the time, but “we don’t want them to worry about documentation right now, because they can bring that back later.”
She added that some business owners may have lost documentation and SBA has a partnership with ASCC-Small Business Development Center (SBDC), which is working with SBA in providing assistance, helping business owners and “maybe reconstruct” damaged or destroyed business records, so the owner “can move forward” with a recovery plan.
Other services, provided free of charge by the SBDC to help businesses recover from Gita include: counseling for financial, accounting, marketing and other post-disaster challenges; management and technical assistance; and assistance with updating or rewiring business plans. www.as-sbdc.org
Stokes said she thinks the most confusing issue, is probably the agency’s name — SBA. “Just because of the name, Small Business Administration, a lot of times homeowners and renters think we don’t have a program for them,” she pointed out. “SBA not just for businesses.”
SBA APPLICATION DEADLINE
She also noted that SBA is here as long as FEMA is here and sometimes even longer after FEMA leaves. “Sometimes SBA will set up what is called the Loan Closing Center,” she said, and reminded “our disaster survivors” that May 1, 2018 is the application deadline for SBA “physical damage” applicants and this deadline is typically the same as the registration deadline for FEMA.
“We don’t want them to wait. The sooner they apply, the sooner they can possibly have assistance,” she said and said that the other deadline is Dec. 3, 2018 — for those applying for “economic injury” — businesses that lost income, revenue, some of their customers, they’re not able to meet their normal bills as compared to pre-Gita.
“We give business owners nine months to see where they are at. Sometimes our business owners want to watch their finances just to see if they need to apply,” she shared, but quickly added, “We encourage them to go ahead and apply.
“There’s no obligation to take the loan and that’s on any of our loans, even the homeowners. Go ahead and apply. And if you find that you don’t need the loan, you can simply cancel it,” she said.
Stokes explained that “if you’re approved for a loan — let's say $50,000 — and you find you don’t need $50,000, you can ask your loan officer to decrease the loan to $25,000, that would make the loan payment certainly more affordable and we give you enough to make your recovery.”
“There’s a lot of flexibility built into the program. We don’t want anyone to be afraid to apply because — again — even if you’re approved there’s no obligation to take the loan. Maybe if your church or your friends and family donate money to you, and help you out with your recovery and you don’t need the SBA loan, you can simply request it be canceled,” she said.
“We want everyone to take advantage of all the programs that are available. And then you can make your own decision as to what program you actually need,” she said.
“Maybe FEMA will provide some assistance that’s adequate for your full recovery, that’s fine. And then it maybe a two part program — maybe some FEMA grant money and partially some from SBA, could bring you back to where you were before Gita,” she concluded.