SBA 5 Forms
What Is SBA Form 5 Series?
The Small Business Administration (SBA) Disaster Loan Program is a Federal program created to help homeowners, renters, and businesses to recover from a state or federally-declared disaster and restore the damaged property and real estate. This disaster assistance is provided in the form of long-term low-interest loans.
The SBA 5 forms are two documents that are used to apply for a disaster relief loan:
The SBA also works to connect professional business advisors that may provide technical assistance and management to a recovering small business with the business owners.
SBA Disaster Loans
There are three types of SBA-provided disaster loans:
1. Business Physical Disaster Loans
Business physical disaster loans can be used to repair or replace business-owned real estate, supplies, and equipment damaged as a result of the disaster. Eligible entities include:
- Businesses of any size;
- Charities and churches;
- Private universities and other private or non-profit organizations.
Federal law limits business loans to a maximum of $2 million. However, the SBA has the authority to waive the statutory limit if the business is a major source of employment.
2. Economic Injury Disaster Loans (EIDL)
EIDLs are working capital loans given to small businesses, agricultural cooperatives, and most non-profit organizations that cannot meet their ordinary financial obligations as a direct result of the disaster. EIDLs are limited to $2 million and are only available to those businesses and business owners who cannot provide for their own recovery from non-government sources.
3. Home Disaster Loans
Home disaster loans of up to $200,000 are to provided homeowners to repair disaster-damaged real estate. Homeowners and renters may apply for $40,000 loans to replace property, clothing, furniture, appliances, and vehicles not covered by insurance.
Disaster Business Loan Application
To apply for a Disaster Business Loan, the applicant has to complete and submit the SBA Form 5. The funds may be used to rebuild real estate or property and restore physical damages caused to equipment, machinery, and vehicles. The SBA also provides loans for economic recovery. This includes the business’s inability to pay its ordinary operation expenses, to meet its financial obligations, etc.
A business can borrow up to $2 million for recovery and repay the loan over the next 30 years. If the business does not have credit available at non-federal organizations, the interest rate will not exceed 4%. In other cases, the interest rate may be as high as 8%.
The SBA Form 5 contains a list of the additional paperwork that must be submitted with the form. The inability to provide the required data may result in a loan denial.
Disaster Home Loan Application
The SBA Form 5C is a form filed by renters and homeowners to assist them in rebuilding their primary residence and restoring personal property damaged during a disaster. The completed and signed SBA 5C Form should be submitted to the SBA along with the IRS Form 8821, Tax Information Authorization or the IRS Form 4506, Request for Copy of Tax Return.