Hurricane Isaac’s late August battering of the Mississippi coast has left an estimated 1,500 businesses eligibility for low-cost federal disaster recovery loans administered by the U.S. Small Business Administration.
In addition to disaster assistance applications from 1,558 businesses that claim at least some property damage, another 27 businesses that had no physical damage but claim economic injuries have applied for disaster recovery help, said Carl Sherrill, spokesman for the SBA division that administers federal disaster loans for homeowners, renters and businesses.
Loan assistance to a business can be as high as $2 million for each loan, the SBA says. The loans are for losses incurred between Aug. 26 and Sept. 11. By Sept. 22, the SBA had issued nearly $1.4 million in loans to 48 residents.
The aim is to help businesses and individuals get through a difficult situation brought on by the storm. “Any time a guy’s business is affected his landlord still expects to be get paid,” Sherrill said, adding eligibility includes residential and commercial landlords and hotel-motel operators..
Under federal guidelines, each business must first register with the Federal Emergency Management Agency, or FEMA. “As son as they identify themselves with FEMA we issue them a loan application,” Sherrill said, and added SBA has issued about 7,500 applications to business owners and individuals.
The SBA has distributed about 4,000 applications in Harrison County, about 300 on Jackson County, 208 in Hancock, 170 in Pearl River and 113 in Pike, Sherrill said on Sept. 21.
A presidential disaster declaration made the coastal counties eligible for the SBA help.
“We’re three weeks into this and we’re still issuing 200 to 300 applications a day,” he said.
“Typically, about 85 percent of the money we lend in an event like this will go to homeowners and renters.
“These things have a pattern to them. Individual applications will come in more quickly, Businesses will get back up and running and take care of their customers before thinking how they are going to recover.”
The loans come directly from the U.S. Treasury and offer rates of 4 percent for businesses, 3 percent for non-profits and a rate as low as 1.688 for individuals, according to Sherrill.
Processing takes about 10 days for a business and 16 for an individual, he said.
“When we receive an application we’ll do some initial analysis. We’ll send a loss-verifier out to look at the property,” Sherrill added. “In the case of a business we’ll look how much it will cost to replace inventory, replace machinery and repair property.”
He said the assistance is based on what it is “going to take them to be back to where they were the day before the disaster.”
In structuring the loans, the SBA will look at how much each business or individual can afford to repay each month, Sherrill said. “We can go up to 30 years” if need be.
In instances in which a business has been destroyed, SBA can do a refinance of the business and its property in order to help the owner meet debt obligations, according to Sherrill.
Anyone seeking a SBA disaster loan based on an injury sustained during Isaac must submit an application by Oct. 31. Businesses or individuals claiming economic injury have until May 30 to submit an application, Sherrill said.
The Department of Agriculture is administering disaster loans to farmers affected by Isaac. Sherrill said businesses that supply farms such as tractor and fertilizer dealers may be eligible for the SBA disaster loans.