Natural disasters are among the things that can affect your small business. While this is the last thing any small business owner expects, it is important to prepare for such outcomes. Knowing your alternative financing options in such cases becomes paramount. Understanding the SBA disaster loan programs you can utilize is essential. Here is everything to know about the programs.

How SBA Disaster Loans Work

These are loans available for businesses or individuals affected by natural disasters. The loan programs aim at helping businesses and individuals recover and gain economic stability within a short time. With an SBA disaster loan, you can get help in two forms; a physical disaster loan or a loan for economic recovery. Working capital loans are usually part of the loans for economic recovery. Before applying for this loan program, ensure that you understand your needs.

Applying for SBA Disaster Loans

As much as the loan programs are available, you might miss out on them unless you get organized before applying. Firstly, ensure that you are in a declared disaster area. While natural disasters can happen anywhere and at any time, some places may not be on the list of the declared disaster areas. Check with the federal government to determine if you or your business is within the designated disaster area.

Secondly, have your insurance claim prepared and submitted to your insurer on time. This is important as the SBA disaster loan will only cover the insured damages. You will also have a smooth and effective application process when you involve your insurer. You can use the insurance to reduce or repay the SBA loan.

For your loan to get approval, the SBA has to review your credit. This is to make sure you are legible and a good candidate for the SBA disaster loan. You should also expect inspection work from the relevant authorities to verify your business’s physical or economic damage. With the inspection and verification, you get an estimate of the damage, making the application process beneficial. Expect to work with a designated lender to access the loan.

You can never prepare enough before a disaster strikes your small business. But you can recover and start again with the right alternative financing option. For professional guidance on SBA disaster loan programs, call DAL Commercial Capital today.