Friday, November 2, 2007

Disaster Loans That Are Forgivable?

Dear sirs:

I obtained an sba disaster loan in 2002. Is there a possibility that the loan can be forgiven in five years. There is a rumor going around that it can happen. Is it true?

Thank you

Well I guess my blog (and my website about grants look more professional than I thought! I'm certainly not a "Sir"

Thank you for your email. However the problem with your email is that you don't say what kind of loan it is that you obtained. The SBA has specific titles/names/reference numbers of all of their loan programs and that information you did not provide.

There are forgivable loans that become forgiveable in 3 - 5 years regarding disaster loans but a lot of them require that you take an additional loan from the SBA. (Meaning that the "forgiveable" loan was provided by someone other than the SBA) So that leaves the question of whether or not your loan was only from the SBA or was it obtained from more than one entity.

There are lots of programs that offer forgivable loans. For instance:

Grant Funds, if available may be used to assist economic recovery by providing:

  • Low-interest loans to businesses

  • Revolving loan programs to help businesses reestablish themselves

  • Forgivable loans over 3-5 years

  • Commercial rehab assistance

However the above program is not from the SBA.

You also did not mention whether or not you received the loan for your personal residence or business. It does make a difference. You also didn't mention what area the loan was for. For example in Minnesota flood victims were eligable for forgivable loans ONLY if they applied for additional funding from both FEMA and the SBA. If you did not qualify for the FEMA or SBA loans THEN you could apply for the forgivable loan elsewhere. Flood victims qualified for up to $23,000 in forgivable loans!

So unfortunately you have just not given me enough information.


Anonymous said...

I recedived an SBA disaster loan in 2006 after Hurricanes Jeanne and Francis caused a great deal of damage to a building that we were renovating for a business. We were able to get those renovations completed and the business opened. At first that loan was not a big deal. Then the economy soured and the recession/depression took it's toll. About 2 years ago SBA did lower our payments (not the principle). Now hanging by a thread, we have had to default on personal credit cards in order to keep business going and not dismiss our employee. My husband dropped his health insurance, but I maintain mine. My husband and I work like crazy, but have exhausted ourselves financially. IF this loan were to be forgiven, it would lift some of the burden we face while we wait for the economy to brighten. Is this a possibility? IF so - how do we begin to find out what to do next?

Rose said...

Like I have said before - these kind of forgiveable loan programs have very specific requirements and you will have to find out if your loan meets these kinds of specific requirements. If I were you I would start to check out some of the programs that I have mentioned both here on this blog and on my website about grants.

It's more than likely that you will be able to find a program that will be able to help you financially get back on your feet.