Sba Disaster Loan Authorization and Agreement

The Small Business Administration (SBA) Disaster Loan Authorization and Agreement is designed to provide financial assistance to small businesses that have suffered significant losses due to a declared disaster. Whether it`s a natural disaster like a hurricane or a pandemic like COVID-19, the SBA can provide low-interest loans to eligible businesses to help them recover.

To apply for an SBA disaster loan, small business owners must first complete the Authorization and Agreement form. The form outlines the terms and conditions of the loan and must be signed by the business owner or an authorized representative. Here`s what you need to know about the SBA Disaster Loan Authorization and Agreement.

Eligibility Requirements

To be eligible for an SBA disaster loan, a small business must have suffered physical damage or economic injury as a result of a declared disaster. Physical damage can include destruction of inventory, machinery, or property, while economic injury refers to a loss of revenue or decrease in business due to the disaster. Small businesses, agricultural cooperatives, and non-profit organizations are all eligible to apply for disaster loans.

Loan Terms

The terms of an SBA disaster loan vary depending on the amount and purpose of the loan. Generally, loans of up to $25,000 do not require collateral, while loans over $25,000 may require collateral such as property or equipment. The interest rate for a disaster loan is typically low, around 4-6%, and payments can be spread over a period of up to 30 years. In some cases, the SBA may also offer loan deferments or forbearance to help alleviate the financial burden on the borrower.

Loan Purpose

When applying for an SBA disaster loan, small business owners must specify the purpose of the loan. This can include repairing physical damage, replacing lost inventory or equipment, or covering operating expenses during the recovery period. The loan funds cannot be used for other purposes such as expansion or to pay off existing debt.


Small businesses that receive an SBA disaster loan must make regular repayments in accordance with the terms of the loan agreement. Failure to make payments can result in the loan going into default, which can have serious consequences for the borrower`s credit rating and financial future. Small businesses may be eligible for loan forgiveness if they can demonstrate that they have used the loan funds for their intended purpose and have met all other requirements.

Applying for an SBA disaster loan can be a lifeline for small businesses that have suffered significant losses due to a disaster. The Authorization and Agreement form is an important step in the loan application process, and small business owners should take the time to read and understand all of the terms and conditions before signing. With the help of an SBA disaster loan, small businesses can recover and rebuild after a disaster and continue to thrive in their communities.