The Small Business Administration offers disaster loans to small businesses through seven loan schemes. These are the SBA Microloan Program, SBA Small Business Investment Program, Disaster Loan Program, Export Enhancement Loan Program, Small Business Administration (SBA) Disaster Loan Program, and National SME Loan Program. These schemes have different requirements and have different repayment terms. Some have longer repayment periods than the others.
Before the loans are disbursed, the business owners have to submit proof that they meet the eligibility criteria. They are required to submit proof of their eligibility for eidl second round SBA loans by submitting their business plan to the lender. The lender requires the following documents for eligibility:
Disaster Loan Program eligibility requirements vary from one state to another. The criteria for SBA disaster loans in Kentucky are different than in other states. In Kentucky, a borrower is not required to have filed bankruptcy in the previous two years. A borrower who have a net worth of at least five hundred dollars, who is a resident of the county in which the business is operated, who owns a single drop shipping account, and who purchases products for resale must be declared a candidate for SBA disaster loans.
SBA disaster loans in Kentucky may be approved even if the borrower has a bad credit score or has defaulted in the repayment of loans in the past. There is a requirement that borrowers sell at least seventy percent of their personal property used as collateral. The total value of the collateral must not exceed two hundred fifty thousand dollars. Borrowers have to keep records of all sales including the date of sale, the price paid for the property, and gain and loss amount.
In order to qualify for SBA loans, a borrower must be willing to comply with all loan terms. In order to achieve a loan approval, lenders will want to verify borrower financial data such as current income, net worth, charitable contributions, and credit history.
Lenders also want to know about the borrower’s plans and strategies to use the money for purchasing commercial real estate property, raw materials, equipment, or labor. Most nonprofits organizations applying for SBA disaster loans do not have any plans to invest the money they receive in purchasing property or assets.
The terms and interest rates for SBA disaster loans are very competitive. There is a six-month repayment grace period. Most loans have adjustable interest rates, but the lender may adjust the interest rate on a monthly basis to the Consumer Price Index (CPI) instead of an annual inflation adjustment. To learn more about SBA loans and mortgage foreclosure prevention, register for a free mortgage guidebook.
