What to Do When Disaster Strikes Your Small Business

The U.S. Small Business Administration can help your business get access to the capital it needs to recover from a catastrophe.

Ali Hardy Sep 17, 2019

It takes a considerable amount of grit and resilience to own and operate a small business. In fact, most business owners have weathered a few storms throughout their entrepreneurial journey. But if your business is damaged by a real storm rather than a figurative one, you may need extra help putting the pieces back together.

Fortunately, financial assistance is available to businesses in the event of a catastrophe. The U.S. Small Business Administration (SBA) Disaster Assistance Loan program can help your business get access to the capital it needs to recover.

In honor of National Emergency Preparedness Month, we answer the common questions about SBA disaster loans and how they can help you rebuild your business.

What is an SBA Disaster Assistance Loan?

The SBA Disaster Loan Program offers low-interest loans to businesses impacted by a disaster, such as a hurricane, tornado or flood. This loan program is unique since it’s the only program in which the SBA lends directly to businesses. The SBA defines loan amounts, terms and rates for all disaster loans.

Businesses can borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets. Loans may also be used for structural improvements such as adding a retaining wall or sump pump, clearing out overgrown landscaping, building a safe room or elevating the property to lessen the effect of future disasters, according to SBA.

What Can an SBA Disaster Assistance Loan Be Used For?

There are two types of loans available to help your business recover from a disaster:

  • SBA Business Physical Disaster Loans: If you live in a disaster-declared area and experience property damage, an SBA Business Physical Disaster Loan can help you cover losses not fully compensated by insurance. Loan funds can be used to repair or replace physical items that were damaged or destroyed, such as real estate, personal property, machinery and equipment, inventory and business assets.
  • SBA Economic Injury Disaster Loans: Even if your property was not damaged in a disaster, you can still apply for a working capital loan to help your business resume normal operations. An SBA Economic Injury Disaster Loan provides needed financial assistance to cover operating expenses that could have been met had the disaster not occurred. 

How Do I Qualify for an SBA Disaster Assistance Loan?

To qualify, your business must be in an affected area as stated by a disaster declaration. Search SBA's online database to see if the incident is listed as a Presidential or SBA Agency declared disaster. In addition, the SBA will also review your credit worthiness and repayment ability when qualifying you for a loan. 

How Do I Apply for an SBA Disaster Assistance Loan?

Businesses seeking disaster assistance can apply directly to the SBA. The quickest way to apply is to file your business loan application electronically. You can also apply by mail or in person at a Disaster Recovery Center. Keep in mind that you should not wait to receive an insurance settlement before filing your loan application.

To learn more about SBA disaster loans, visit For additional information, contact SBA’s Disaster Assistance Center by calling (800) 659-2955 or emailing You can also contact your local SBA District Office.

Ali Hardy is a freelance writer for Zions Bank.

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