SBA Low Interest Loans For Declared Disaster Areas

As of March 18, 2020 Santa Barbara County is declared an affected disaster area. SBA provides low-interest disaster loans to businesses of all sizes, private non-profit organizations, homeowners, and renters. SBA disaster loans can be used to repair or replace the following items damaged or destroyed in a declared disaster: real estate, personal property, machinery and equipment, and inventory and business assets.


FAQs on disaster loan assistance

How does the Disaster Loan program differ from other SBA Programs?

  • The Disaster loan programs are administered & underwritten directly by the SBA.
  • More commonly used SBA loans can be underwritten by banks & can be used for various business purposes.
  • Contact your bank about these additional SBA programs to determine if they’re a good fit for your business

How do I apply for a Disaster Loan, specifically an Economic Recovery Loan with my bank?

Are these my only options to access short term working capital?

  • No, there are many lenders looking to provide resources, including leveraging your existing banking relationship to identify debt or alternative treasury management practices.
    • Consider first performing an analysis of your fixed vs. variable costs, determining your 30, 60 and 90 day cash flow forecasts, managing accounts payable and accounts receivable, and also perform an analysis over the impact of COVID-19 on your immediate revenue forecast.
  •  If you have questions about managing working capital and liquidity contact your SCORE Mentor! Don't have a SCORE Mentor? Request one now at NO COST to you:

Get more information about the loan program and to apply for assistance at

Insights into the SBA Process:

What is the turnaround time on this SBA loan application?

  • It will take 2-3 weeks to process the application and at least 30 days to issue cash to the applicant. Per the SBA, the process should not take anywhere near 90 days (as of 3/23/2020).

What qualifies as a small business?

Do you have to aggregate other commonly controlled businesses? 

  • For common controlled groups, the SBA is only focusing on the stand-alone business that is applying for the loan at this time. However when calculating debt/equity ratios, they will likely look at everything that belongs to the business owner(s) which could make or break the application.

Will personal guarantees be required?

  • Personal guarantees are required if requesting $25,000 of financing or more (as of 3/22/2020).

Are tax returns required?

  • No tax returns are required at this time; the SBA is trying to streamline this process (as of 3/22/2020).

What can these loans be used for?

  • These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
  • The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere may not be eligible for these or may obtain these loans a higher interest rate. The interest rate for non-profits is 2.75%.

How big is the potential facility?

  • SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.

What are the terms of the loan?

  • SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

Are 501(c) entities eligible for SBA Economic Recovery Loans?

  • 501(c)(3) entities are eligible to apply for SBA Economic Recovery Loans at a rate of 2.75% . As of March 24, 2020, only 501(c)(3) entities are currently eligible for SBA products. The American Society of Association Executives submitted a letter to Secretary Mnuchin, Speaker Pelosi and Leaders McConnell, Schumer and McCarthy asking the SBA to support all 501(c) entities.

If I can qualify for financing elsewhere, am I still eligible for this program?

  • If an applicant is able to get disaster financing from another source, the SBA could deny the application or apply an interest rate higher than 3.75% for small business owners or 2.75% for non-profits.

What is the process for applying for this loan?

When should I reach out to discuss options?

  • Reach out to SCORE SB and your other professional service partners (e.g bank, attorney) right away. 

Should I call my bank about this program?

  • A call to your banker is prudent. The bank is most likely educated about this program and may have additional financing ideas.
  • At this time the banks cannot submit a request for these programs on your behalf.
  • Your bank may be able to talk to you about additional SBA programs they currently support.

How do I know if my bank partners with the SBA?

  • Contact your bank to determine if they work with the SBA
  • Certain banks are known as “preferred lenders” – The SBA defines this as follows:
  • Under the Preferred Lenders program, the SBA gives select lenders more authority to process, close, service, and liquidate SBA-guaranteed loans. An SBA field office serving the area in which a lender’s office is located can nominate the lender, or the lender can ask a field office to consider it for preferred status.
  • In making its decision, the SBA considers whether the lender:
    • Has the ability to process, close, service and liquidate loans
    • Has the ability to develop and analyze complete loan packages
    • Has satisfactory SBA performance

If I cannot make payroll, what are my options?

  • Contact your legal counsel to ensure adherence to all local, state and federal laws.

How do I contact the SBA?

  • Reach out to your bank and see how they partner with the SBA.
  • For additional information, please contact the SBA disaster assistance customer service center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or ​e-mail.
  • The SBA recently launched a COVID-19 page covering challenges for small business, disaster loans, etc. Find more information at