Federal loan office opens in Flagstaff, disaster relief loans now available for flooded Arizonans
The US Small Business Administration (SBA) declared this week that it would make low-interest federal disaster loans available to assist Arizona businesses and residents affected by severe storms, flooding, mudslides and debris flows that occurred between July 23 and Aug. 28.
Based on the SBA declaration, assistance is now available in the Coconino, Gila, Mohave, Navajo and Yavapai counties of Arizona, as well as the Kane and San Juan counties of Utah.
Last year, the SBA offered similar types of assistance to Arizonans impacted by flooding. This summer, Coconino County alone endured more than 40 major post-fire flood events that impacted at least 1,500 properties collectively valued at more than $1.3 billion.
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According to an SBA press release, the new declaration from the organization came “under its own authority” and “in response to a request SBA received from Governor Douglas Ducey on Sept. 16, 2022.” The declaration makes businesses and private nonprofits impacted by flood events eligible to borrow up to $2 million to “repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets.”
For homeowners, loans of up to $200,000 are available to repair or replace real estate. Both homeowners and renters are eligible for loans up to $40,000 to repair or replace personal property. The SBA can also lend additional funds to “help with the cost of improvements to protect, prevent or minimize the same type of disaster damage from occurring in the future.”
Interest rates on the loans can be “as low as 2.935% for businesses, 1.875% for private nonprofit organizations, and 1.688% for homeowners and renters with terms up to 30 years.”
The SBA declaration also makes available “economic injury assistance” for “small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations of any size.” These loans are meant to “help meet working capital needs caused by the disaster” and are available “regardless of whether the business suffered any property damage.”
It’s in the interest of economic injury assistance that the SBA is offering loans to counties directly contiguous with Coconino, explained Louise Porter, SBA public information officer currently located in Flagstaff. For example, those impacted by the frequent closures of highways 89 and 180 in Flagstaff could be eligible for assistance, though they would have to demonstrate disruption to their business caused by these closures.
Usually, it is not “overwhelmingly burdensome” to make such a claim, Porter said.
“I always recommend that people put an application in,” she said.
In her experience, SBA loans can offer several advantages for those hoping to get their life back on track after a disaster. First, applications are non-binding.
“Putting in an application doesn’t mean that if you’re approved, you have to accept it,” Porter said.
Secondly, SBA loans can sometimes dispense funds before insurance, making them a way to bridge the gap if people can’t wait.
While SBA loans won’t duplicate a payment already made by insurance, “this program can get people the funds, and then if and when the insurance comes in, it can go to repay that [the SBA loan] later,” Porter explained.
And finally, the low interest rates make SBA loans superior to credit card debt or other forms of immediate financing.
“When flooding happens, a lot of times, people will just go out and put a couple thousand on their credit card if they have that available,” Porter said. “Even with good credit, credit card interest rates are like 17% to 20%. That’s crazy.”
While the availability of relief loans cover a wide range of circumstances, they are unfortunately limited to claims regarding physical damage or business assistance. Mental health injuries related to the stress of coping with disaster do not necessarily make one eligible for SBA loans, according to Porter, yet she and her team would like to be able to help people through such challenges.
“I tend to see that when people are suffering with that kind of stress and anxiety — which is really normal — they can have a hard time handling of their personal business,” Porter said. “That’s one of the reasons why we set up places where people can go and talk to someone in person.”
Currently, the SBA has set up an outreach center in the Coconino County Health and Human Services building located at 2625 N. King St. in Flagstaff. As of Sept. 20, the center is open Monday through Friday from 8 am to 5 pm The center will close Oct. 6 at 5 pm, and the deadline to apply for property damage loans is Nov. 18.
“That’s a pretty hard deadline,” Porter said.
There is a “small grace period” during which applicants can request late acceptance, but Porter strongly recommends making sure applicants meet the deadline.
“You don’t want the agency to have to make a determination whether or not they will even take your application,” she said. “It’s a limited time.”
For those interested in economic injury loans, there is more time to apply. That deadline is June 19, 2023.
Porter explained that loans, interest rates and payment options are determined on an individual basis. The only way to know for certain is to apply.
“It’s worth trying, I believe,” Porter said. “It can really save people some money and help get their lives back together.”
Applicants may apply online, receive additional disaster assistance information and download applications at disasterloanassistance.sba.gov/. Applicants may also call SBA’s customer service center at (800) 659-2955 or email [email protected] for more information on SBA disaster assistance. For people who are deaf, hard of hearing or have a speech disability, please dial 711 to access telecommunications relay services. Completed applications should be mailed to US Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, Texas, 76155.
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