Small Business Administration loans are being pushed in many areas. This cash today product has been promised to homeowners and business owners to help rebuild after emergencies. Offered at 4 to 6 percent interest, the SBA offers this supposedly quick loan solution to victims of floods, fires and the Gulf oil spill.
What SBA loans are for
For “everyday use” small businesses use SBA loans to build and develop. The SBA is really a loan guarantee entity. It won’t give out loans but is willing to work with banks in giving out loans to people instead. Everyone who was affected by some kind of disaster can get disaster loans from the SBA. Like all loans, SBA loans consider the credit of borrowers and their ability to repay. SBA loans tend to be mostly for people who “are having difficulty accessing other credit.”.
Emergency money denied
SBA emergency cash loans typically go to those who just experienced an emergency very just lately. SBA loans up to $200,000 are given to those in Massachusetts to rebuild from the flood. Businesses can take out more than that with a max of $2 million and will only have interest rate of about 2.75 percent. Of course, BP has to pay for damages before the SBA will accept application which is why 70 percent of applicants in Louisiana were denied. In Tennessee, about 66 percent of flood emergency cash loans are being denied.
Finding a way to appeal decisions about your loan
The majority are frustrated with being unable to rebuild after being denied the loan. With credit inaccessible right now with everything going on, the SBA can’t help many victims. If you want to appeal your decision, you are able to provide new info, show your circumstances have changes, or correct the info posted on your application. In the end, though, these loans generally end up going to individuals who show proof they can repay them — and that could be very tough to show after a disaster and within the tough economy.
Further reading
Tennessean
tennessean.com/article/20100729/BUSINESS01/7290344/SBA-denies-most-loans-for-flood-damaged-businesses
Boston.com
boston.com/yourtown/news/somerville/2010/07/fed_agency_to_offer_low-intere.html
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