SBA Disaster Funding—California Small Business Disaster Resource Guide

If you are located in a federally declared disaster area in California, you may be eligible for financial assistance from the U.S. Small Business Administration (SBA).

What Types of Disaster Loans are Available?

Business Physical Disaster Loans

Loans to businesses to repair or replace disaster-damaged property owned by the business, including real estate, inventory, supplies, machinery, and equipment. Businesses of any size may be eligible. Private, non-profit organizations such as charities, churches, and private universities may also be eligible.

Economic Injury Disaster Loans (EIDL)

Working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, non-profit organizations of all sizes meet ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period.

What are the Credit Requirements?

Credit History
Applicants must have a credit history acceptable to SBA.

Repayment
Applicants must show the ability to repay all loans.

What are the Interest Rates?

By law, interest rates depend on whether each applicant has Credit Available Elsewhere. An applicant does not have Credit Available Elsewhere when SBA determines the applicant does not have sufficient funds or other resources, or the ability to borrow from non-government sources, to provide for its own disaster recovery. An applicant SBA determines has the ability to provide for its own recovery is deemed to have Credit Available Elsewhere.

Interest rates are fixed for the term of the loan. The interest rates applicable for SBA disaster loans are:

Physical Damage Loan Types

	No Credit Available Elsewhere	Credit Available Elsewhere
Business Loans	4.000%	8.000%
Non-Profit Organizations	3.250%	3.250%

What are the Loan Terms?

The law authorizes loan terms up to a maximum of 30 years. However, the law restricts businesses with credit available elsewhere to a maximum 7-year term. Borrowers may be required to provide collateral.

SBA Loan Flexibility

One of the most common concerns we hear from small businesses is that they already carry a burden of debt and may not be able to take on an SBA disaster loan to recover and remain resilient. Please note the following flexibilities that may be available to existing and potential SBA borrowers.

For SBA Disaster Loans (when available for the declared event)

Borrowers may receive an initial period with no payments due (terms vary by disaster declaration and SBA guidance).
If you decide not to take the approved loan, you may cancel the offer without penalty.

For Existing SBA Loans

COVID EIDL Loans
SBA offers a Hardship Accommodation Plan (HAP) for COVID EIDL borrowers experiencing short-term financial challenges. Eligible borrowers may pay 10% of their usual payments for six months, without first catching up on missed payments. Borrowers may have the option to renew after the plan concludes. Interest will continue to accrue, which may increase (or create) a balloon payment due at the end of the loan term. More info: https://lnkd.in/ehw4DQ-y

SBA 7(a) Loans
For 7(a) loans not sold on the secondary market, lenders may grant payment deferments of up to 6 consecutive months (no SBA notification required). For 7(a) loans sold on the secondary market, lenders may grant a one-time unilateral deferment of up to 90 days without prior investor consent. Contact your lender for guidance on deferments, including options beyond these guidelines.

SBA 504 Loans
Generally, the amount deferred should not exceed six cumulative monthly payments or 20% of the original loan amount, whichever is less. During the deferment period, the Certified Development Company (CDC, the SBA 504 lender) should monitor the borrower’s operations to determine whether an additional deferment is necessary and prudent.

SBA Microloans
The SBA microloan intermediary lender can defer microloan payments for up to six months. The lender can also modify a microloan to extend the term to a maximum of 7 years. If these options do not work, the lender can consider refinancing a microloan with a new microloan.

Additional Resources

Click below to view other resources for business owners affected by disasters, or return to the California Small Business Disaster Resource Guide.

Access to Capital

Ready to Get Started?

The Orange County/Inland Empire Small Business Development Center Network can help you understand eligibility, prepare documentation, and navigate the SBA process when a federal disaster declaration is in place. Our services are provided at no cost.

Schedule your intake or call now: (800) 616-7232