Financial Aid During COVID19: How SBA Disaster Loan Disbursement Works


The impact of the coronavirus epidemic on the GPD might be bigger than that of the international recession in 2008. For that reason, small business owners want to learn how SBA disaster loan disbursement works.

While the epidemic impact has affected both small and established businesses, the small business has been hit hard. Therefore, many will require financial aid to service, and that’s where SBA disaster loan disbursement comes in handy.

Read through for more information about SBA disaster loan disbursement and how it helps.

SBA Disaster Loan Disbursement Explained

When a situation is too serious about being declared a disaster by the office of disaster assistance, small business administration will come in to offer lower interest loans to those businesses affected by the disaster. The parties involved can be homeowners, businesses, renters, homeowners, and nonprofits. Typically, a disaster may only impact one or even two of these categories. This could be a situation in case of a natural disaster such as a tornado or hurricane. Nevertheless, the coronavirus epidemic has affected all these parties. This has made an unprecedented demand for SDB loans.

How to Apply for SBA Disaster Loans

People can apply for this loan by email, online, or visit a disaster recovery center to apply in person. Applying online is a convenient approach, and with the current circumstances, it’s the safest. The application for an SBA loan will have similar details to any other loan application. The moment you apply for this disaster loan, you will be eligible to apply for FEMA grants like help packages for dental and medical programs. So, it’s good to apply for this loan even when you are unsure whether you’ll use it or not.

Here are some of the details that SBA will consider when approving your application.

Credit Score

SBA will look at your credit rating when approving your loan request. You need to have a minimum credit score of 620-640 to qualify for this loan. Nevertheless, if you don’t meet this requirement, the SBA will look at other things like payment history as per your rent, insurance, and other expenses not related to debt.


Your capability to offer security against a disaster loan might be relevant, partially for large loans.

Types of SBA Disaster Loan Disbursement

There are numerous types of SBA disaster loans. The kind you will apply for will be based on the type of disaster and the capacity you need the funds if you are a homeowner or business owner.

  • Economic injury disaster loan
  • Homeowner disaster loan
  • Business-related physical SBA disaster loan

What’s the Repayment Structure for SBA Disaster Loan?

The repayment plan for this kind of loan is different from ordinary business funding. Since they are meant to assist struggling families and help business service, they have an extended repayment duration of up to 30 years.

Alternatives to Disaster Loans

Even though SBA loans can be what you need during this pandemic, you have other options. Traditional lending entities are still in operation even during the crisis. Some of the loan options accessible to business comprise:

  • Invoice factoring
  • Line of credit
  • Bridge loan
  • Term loan