Deadline Is April 1 for Sandy Disaster Loans

Even after a deadline extension of a month, the U.S. Small Business Administration is worried that too few people are taking advantage of interest rates as low as 1.69 percent on loans to repair and replace real estate and personal property damaged by Superstorm Sandy. 

Homeowners, renters and businesses have until April 1 to submit disaster loan applications.

The loans are from U.S. Small Business Administration (SBA) but are not in any way limited to small businesses. (See attached PDF for a fact sheet on the program.)

"Not everybody realizes that when they hear 'Small Business,' " said Karen Knapik, public affairs specialist for the U.S. SBA's Office of Disaster Assistance.

The low-interest loans can provide homeowners up to $200,000 for repairs and reconstruction and up to $40,000 to replace personal property.

Knapik says just 16 percent of the owners who have registered with FEMA for disaster assistance have returned applications for SBA loans, and she encourages all homeowners to apply while the opportunity to take advantage of the low-interest emergency loans still exists.

"This low return rate indicates that many are confused or misunderstand the benefits of applying and having this safety-net available to them many months later," Knapik said. "Working through the SBA process can make funds available some 8 to 10 months down the road, and with all the discussion about other grant and loan programs yet to come, there is much need for clarification. People are hearing messages about grant money, and we think that's what they're waiting for."

"There is no cost to apply, and it takes only 15 to 20 minutes," Knapik said.

April 1 is also the last day to register for any other emergency disaster assistance from the Federal Emergency Management Agency (FEMA). This assistance is intended to provide shelter and relief to displaced residents.

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To apply for a loan: Visit the Disaster Recovery Center at the Ocean City Free Public Library (9 a.m. to 7 p.m. Monday through Friday or 9 a.m. to 4 p.m. Saturday) or apply online at https://disasterloan.sba.gov/ela.

To register for assistance: Visit www.DisasterAssistance.gov or call 800-621-3362
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As of March 22, the SBA had approved disaster loans to Sandy survivors for a combined $643.5 million. 

"We try to make up the difference for what insurance doesn't pay," Knapik said.

But Knapik said applying for an SBA loan does not obligate a homeowner to accept the loan.

She said loan offers are typically made within 21 days of application — then owners have up to two months to respond. If an owner declines, the loan offer stands for another six months. If an owner then expresses a desire to renew the application, the owner would have another 60 days to respond. The process allows an owner up to 10 months to decide on whether to accept an SBA loan.

The application is the starting point for borrowing money for reconstruction, mitigation, relocation or refinancing.

The quickest way to apply is online using the Electronic Loan Application (ELA) via SBA’s secure website at https://disasterloan.sba.gov/ela.  Additional details on the locations of recovery centers and the loan application process can be obtained by calling SBA’s Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or by sending an email to disastercustomerservice@sba.gov.  Loan applications can be downloaded from www.sba.gov/sandy.