SBA extends fire relief deadline for those thought to be ineligible

Jan. 21—The U.S. Small Business Administration has distributed more than $257.3 million in disaster loans for 1,391 applicants who sustained property damage from the Aug. 8 wildfires and high winds on Maui, but officials have extended the application period through Jan. 25 because they believe more people are qualified than have applied.

Barbara Nitis, public information officer for the SBA's Office of Disaster Recovery and Resilience, Field Operations Center-West, said the deadline was Dec. 11 for the SBA's property damage loans. However, a 45-day grace period is in effect and the deadline is rapidly approaching.

"Homeowners, businesses, renters and private nonprofit organizations have until Jan. 25 to apply for property damage loans," Nitis said. "Funds are available and people are not taking full advantage. Usually we only have a two-week grace period, but in this case it's 45 days."

SBA records as of Wednesday showed that the Federal Emergency Management Agency referred 11,145 home registrations and 4,040 business registrations to SBA's property damage loan program. Of those, 2,461 home registrants, or 22% of FEMA referrals, applied for SBA's property damage loan program. Some 920 business registrants, or 22.7% of FEMA referrals, applied.

SBA has approved more than $188.4 million for 1,115 Maui disaster loans for property damage for homes, and more than $62.4 million for 260 businesses or private nonprofits.

Nitis said homeowners who apply for property damage loans are eligible for up to $500,000 to repair or replace real estate damage and up to $100,000 to replace personal property, including automobiles. She said renters are eligible for up to $100,000 to repair or replace personal property, including automobiles.

Nitis said businesses of any size and private nonprofits that sustained property damage are eligible for loans of up to $2 million to repair or replace real estate, machinery and equipment, inventory and other assets.

Those whose property damage loan applications are approved may be eligible for additional funds to cover the cost of improvements to protect their properties against future damage, including for retaining walls, seawalls, sump pumps and the like.

"We are trying to let everyone know that there is light at the end of the tunnel," she said. "I've heard some great success stories. Those who have been approved are using the funds as we speak to help them recover whatever they have lost in the disaster."

Nitis said interest rates can be as low as 4% for businesses, 2.375% for private nonprofit organizations, and 2% percent for homeowners and renters with terms up to 30 years. Funds may be used to relocate or refinance existing mortgages, she said.

Nitis added that loan amounts and terms are based on each applicant's financial condition.

"Because the SBA utilizes taxpayer funds to lend to disaster victims, it is our responsibility as a creditor to establish a reasonable assurance that disaster loans will be repaid. SBA uses the applicants credit bureau report to document a reasonable assurance that a disaster loan will be repaid," Nitis said. "Accordingly, our decisions are based on a balance between our role as provider of disaster assistance and our responsibility to protect the government's interest. SBA loan officers review the applicant's historical pre-disaster willingness and ability to meet their obligations."

Some potential applicants, who believe that they will not qualify for an SBA loan or do not have time to gather all the necessary information, have been reluctant to apply. Some potential applicants, who are not American citizens, also have been reluctant to apply for fear of deportation.

"Applicants won't be deported for applying," Nitis said. She encouraged all affected by the wildfires to apply for SBA assistance as those who do not qualify get referred back to FEMA for other needs assistance, which also opens doors to other nonprofit assistance.

Nitis said that those who need more time to meet application requirements should apply before the expiration date since they have six months from the date of a denial to appeal and provide additional information.

The deadline to apply for an SBA economic injury disaster loan, referred to as EIDL, which provides up to $2 million to qualifying businesses and private nonprofits, also is approaching on May 10. Like the SBA property damage loans, these loans are available for those impacted by wildfires and high winds between Aug. 8- Sept. 30, 2023.

She said the EIDL is available for businesses in Maui County, as well as those in Hawaii, Honolulu and Kauai counties that experienced economic losses.

SBA records as of Wednesday show that 1,272 applicants applied for EIDL loans, with 341 approved for a combined total of more than $38.7 million.

Nitis said both loans are meant to provide a cushion for fire survivors, who don't have to decide right away if they will use them.

"We encourage people to complete the SBA application even if they are not sure if they need it yet. If approved, the loan becomes an option," she said.

Nitis said there is a 12-month deferment with 0% interest for SBA's disaster government loans. Interest does not begin to accrue until 12 months from the date of the first disaster loan disbursement. SBA disaster loan repayment begins 12 months from the date of the first disbursement.

She said businesses that are reluctant to apply for the EIDL because they already had taken one out during the pandemic should note that because of the disaster, there is a six month deferral for the COVID-19 EIDL.

Beyond the loan programs, Nitis said SBA and its resource partners, such as Operation Hope, Small Business Development Center, Women's Business Center, SCORE and Veteran's Business Center, also are offering free services, including counseling for financial, accounting, marketing and other post-disaster challenges. Management and technical assistance along with business planning are offered.

In addition, help is available for reconstructing damaged or destroyed business records, as well as assistance to access government contracts and procurement related to the disaster.