Covered - Uninsured or otherwise uncompensated disaster losses are eligible. Loans can cover property loss, relocation expenses and refinancing. In case of a business, loans can also cover inventory loss, business interruption, payroll and utilities.
Not covered - Secondary homes, pleasure boats, airplanes, recreational vehicles if not primary home, unless used for business purposes. Antiques and collections are eligible only to the extent of their functional value.
June 30 - Loan applications for all physical damage from the April 27 storms must be filed by the end of June
Feb. 1 - All nonphysical damage from the April 27 storms, such as lost revenue due to closure of a business
Toll Free - (800) 877-8339
E-mail - email@example.com
In person - Any FEMA disaster center
In the mailbox - Packets are automatically mailed out to many victims
Source: Small Business Administration
When the U.S. president issues a disaster declaration, the first wave of emergency personnel converge on the hardest-hit areas, digging out trapped victims and sheltering the homeless.
The second wave arrive in suits with loan applications and grant forms, ready to open the U.S. Treasury to those who need a loan to cover their losses.
That's where Walter Perry, district director for the U.S. Small Business Administration, comes in.
In spite of the "small business" moniker, the agency arrives prepared to make low-interest rate loans to homeowners, renters and even nonprofit organizations for the duration of the disaster period, which ends June 30.
"When people hear Small Business Administration, do not be misled; we offer loans for everyone," he said. "And we recommend that everyone apply immediately."
Homeowners can get up to $200,000, and businesses can get up to $2 million.
To date, Perry has issued over 1,000 applications in Tennessee from the April 27 storms, and plans to start making loans to storm victims within the week. He can approve a loan within 10 days, and have money directly deposited in an account a few days after that.
"They could have their loan approved by the end of next week, if they apply now," he said.
Perry has access to the purse strings of the federal government, and can offer interest rates as low as 2.69 percent to homeowners, compared with about 5.4 percent available commercially.
To sweeten the deal, there's a five- to six-month grace period before the first payments come due.
"If there is a shortfall in insurance or FEMA does not cover the damage with a grant, an SBA loan can bridge that gap," Perry said. "We want to be a part of that recovery process."
The SBA will not decline a loan for lack of collateral, which is helpful to property owners with a decimated structure.
But since the agency is issuing a loan with the expectation of being repaid within the next 30 years, it looks at credit history, the ability to repay, and any undamaged assets that can be pledged, he said.
Tom Nocera, public affairs specialist for the SBA, said the agency anticipates providing "tens of millions" of dollars in low-interest loans through the end of June, which is the application deadline.
To do that, Nocera and others have to contend with the public perception that the SBA serves only businesses during a disaster.
"When these applications are mailed to people, often these people open up the envelope, see the Small Business Administration name, and think that doesn't apply to them," he said.
But that application is victims' "gateway to federal assistance through the disaster relief program," he said. Furthermore, if applicants are turned down because of bad credit or an inability to repay, they are forwarded over to FEMA for priority assistance, he said.
The agency made nearly 4,000 loans worth $184 million in 48 counties during the Nashville floods of 2010, Perry said, which was a key factor in getting dollars in the pockets of those in need.
There are fewer counties affected this time around, but "certainly we would still anticipate strong demand for relief," he said.
What is the SBA?
The reason the SBA is assigned to help make loans during disasters is because credit a primary agency mission.
On a normal day, the government will guarantee up to 85 percent of loans made by commercial banks to small businesses, which helps to reduce the bank's exposure in case of a default.
They're not direct federal loans like the government's disaster assistance program, but they do provide millions in working capital.
In the last 1 1/2 years, the SBA backed 95 loans in Hamilton County worth more than $54 million for everything from car washes to hotels, Perry said.
The agency also provides up to $500,000 in loan assistance to veterans, and has made permanent a program designed to double the country's exports over the next five years, said David Tiller, the SBA's international trade officer for Tennessee.
It's called "export express," Tiller said, and it's a hard offer to ignore.
With no collateral requirements, businesses can borrow up to $500,000 to bolster their exports, with the SBA guaranteeing 90 percent of the loan.
"That provides a safety net for banks, and they like that in these times we live in," Perry said. "We can help people with a much more attractive rate than a credit card, with a much longer term."
But right now, the best bet for businesses with uninhabitable property is to explore their options quickly, he said.
Small business incubators in Chattanooga and Cleveland are available for temporary offices, and the business experts at the Tennessee Small Business Development Center can help with damage-related paperwork.
"We're trying to make this community whole again," he said.