SBA to Assist So Cal Businesses Hurt by Wildfire

Homeowners, renters, and small businesses can apply for assistance.

Source : CC

January 30, 2025

Author : Alex Bustillos

The Small Business Administration (SBA) is stepping up to help those affected by the devastating wildfires in Southern California. Businesses, homeowners, and renters in Los Angeles, Kern, Orange, San Bernardino, and Ventura counties now have access to low-interest disaster loans to aid in their recovery. These loans are designed to provide a financial lifeline to those who are struggling to rebuild their lives and businesses in the wake of this disaster.

The SBA Disaster Loan Program offers critical funding to cover various needs. Small businesses can borrow up to $2 million to repair property damage or compensate for lost revenue caused by the fires. Homeowners can receive up to $500,000 to repair or replace damaged property, and renters are eligible for up to $100,000 to recover essential personal belongings. For businesses facing lost revenue, the SBA is also providing Economic Injury Disaster Loans (EIDLs) to help with working capital needs, even if there is no physical property damage.

To support affected communities, the SBA has opened two Business Recovery Centers in Los Angeles County. These centers provide a space where business owners and nonprofit leaders can meet with specialists to learn about their options, complete loan applications, and access additional resources. Walk-ins are accepted, but appointments are encouraged to ensure timely assistance. People can visit the Women’s Business Center in Reseda or the Santa Monica Chamber of Commerce for help during scheduled hours.

The loan terms are designed to be as accessible as possible. Interest rates are set as low as 4% for small businesses, 3.625% for nonprofit organizations, and 2.563% for homeowners and renters. Loan terms can extend up to 30 years, and there is no requirement to start payments or accrue interest for 12 months after the first loan disbursement. The SBA also offers an option to increase the loan amount by up to 20% of the verified physical damages to fund improvements that will help protect against future disasters. This could include measures like insulating pipes, weatherproofing windows and doors, and installing storm windows.

The wildfires have caused immense damage across Southern California, and the challenges are even more significant for those without adequate insurance coverage. Many businesses and homeowners have found themselves underinsured, with coverage that falls short of the actual costs to rebuild or replace their losses. For them, the SBA loans serve as a critical option to help fill the gaps left by insurance. Even for those who are insured, these loans can cover needs that insurance doesn’t address.

The financial support provided through this program is part of a larger federal effort to help disaster-affected areas recover. The SBA is working closely with the Federal Emergency Management Agency (FEMA) to ensure that survivors can access both grants and loans as quickly as possible. While FEMA grants are designed to cover urgent needs not met by insurance or other resources, the SBA’s disaster loans aim to provide the long-term funding needed to fully recover and rebuild. The SBA encourages individuals to apply for both programs simultaneously rather than waiting for one to be approved before applying for the other.

The recent fires have struck a state that is already grappling with insurance challenges. Many insurers have been pulling out of high-risk areas or raising rates, leaving homeowners and businesses with fewer options. SBA Administrator Isabella Casillas Guzman emphasized the importance of these loans during a recent visit to the fire-affected areas. She pointed out that many businesses lack sufficient insurance, making the SBA program one of the few available options for recovery funding.

The deadline to apply for loans to cover physical property damage is March 10, while applications for economic injury loans are due by October 8. Those interested in applying can visit the SBA’s website or call their Customer Service Center for guidance. For individuals with hearing or speech disabilities, telecommunications relay services are available.

The SBA’s commitment to helping disaster survivors rebuild extends beyond immediate financial support. By working closely with local communities, nonprofit organizations, and other government agencies, the SBA aims to ensure that recovery is as smooth and comprehensive as possible. With funding replenished by Congress through the American Relief Act, the SBA is fully equipped to meet the needs of those affected by this disaster. Guzman assured that her agency remains ready to coordinate with Congress and other partners to provide timely and effective support.

The impact of the fires has been devastating, but the SBA’s disaster loan program provides a ray of hope for those facing the long road to recovery. With accessible terms, dedicated recovery centers, and a focus on both immediate and long-term needs, the SBA is helping communities rebuild from the ground up, making sure they emerge stronger and more resilient than before.

Category : Small Business Enterprises Federal Government Market Watch

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