Emergency SBA Loans Denied To Two Thirds Applicants

Numerous places are trying hard to get more low interest Small Business Administration loans out there. This cash until payday loan product has been promised to homeowners and business owners to help rebuild after emergencies. The quick loan solution has about 4 to 6 percent interest and also the SBA offers it for floods, fires, and even oil spills lately.

Intent of SBA loans

Building and developing is the “everyday use” that SBA loans are really for. The SBA is really a loan guarantee entity. It won’t give out loans but is willing to work with banks in giving out loans to people instead. The SBA also offers disaster loans for many who have had to endure a disaster. Being able to pay back an SBA loan is considered with credit when applying for one. SBA loans tend to be mostly for people who “are having difficulty accessing other credit.”.

Everyone who can’t even get an emergency loan

SBA emergency loans typically go to those who just experienced an emergency very lately. In Massachusetts, for instance, the SBA has announced that loans of up to $200,000 are available to homeowners to rebuild after floods. Businesses will be able to take out loans of up to $2 million, with interest rates as low as 2.75 percent. Of course, BP has to pay for damages before the SBA will accept application which is why 70 percent of applicants in Louisiana were denied. In Tennessee, about 66 percent of flood emergency money are being denied.

Appealing decisions on loans

Loans are being denied so easily and at such a high rate that people are starting to get mad. Since people can’t even access their credit, the SBA program can’t help anybody. The SBA does have an appeal process that allows applicants to provide new details, show proof of altered circumstances or correct details within the original applications. In the end, though, these loans generally end up going to individuals who show proof they can repay them — and that could be very tough to show after a disaster and within the tough economy.

Resources for the article

Tennessean

tennessean.com/article/20100729/BUSINESS01/7290344/SBA-denies-most-loans-for-flood-damaged-businesses

Boston.com

boston.com/yourtown/news/somerville/2010/07/fed_agency_to_offer_low-intere.html