Federal loans available for business owners affected by disasters

Federal resources are available for business owners affected by New Mexico's recent disasters.

Cynthia Cowell is a spokesperson for the U.S. Small Business Administration’s Office of Disaster Recovery and Resilience. She said the office offers loans up to $2 million for physical damage and economic injury following federally declared disasters.

There are also resources available for homeowners and renters, she said, including up to $100,000 to replace personal property and up to $500,000 to replace primary residences.

The loans can also be used for mitigation measures, at up to 20% of the damaged amount, which Cowell said is a “very much recent development” in SBA loans.

Ruidoso is eligible for the loans, since the disaster was federally declared. State leadership, including Gov. Michelle Lujan Grisham and the state’s congressional delegation, had been advocating for President Joe Biden to declare Roswell a disaster area, which he did late Friday afternoon.

“Due to the life and death nature of this crisis, we urge you to act without delay and approve the State of New Mexico’s request for a major disaster declaration,” the delegation’s letter to Biden read. “It is imperative that the federal government provides full support to New Mexican communities to respond and recover from the devastation caused by this flooding.”

The SBA business and nonprofit loans come with a low fixed-rate interest — 4% for businesses, 3.25% for nonprofits and 2.688% for homeowners or renters, Cowell said — with terms of up to 30 years. People don’t accrue interest or have to make a payment for the first 12 months.

Cowell said the SBA looks at credit — but isn’t as tough as other entities and considers the disaster impact — and ability to repay.

“A lot of people are afraid to take on a loan right now, period, and that's totally understandable, but you don't have to take the money that SBA offers you, and it's good to have it if you need it,” she said.

Cowell added that owners renting out properties are eligible for the damage and injury business loans, since rental properties are considered businesses.

The deadline to apply for physical damage ended Oct. 19, but Cowell said SBA has a “very generous grace period.” She said the SBA will stop accepting applications online in mid-November.

“If people can get their applications in soon, they can be considered for loans for this event,” she said.

The deadline to apply for economic injury loans is March 20, 2025, Cowell said, “so businesses have some additional time to determine what their economic injury could be.”

The SBA had received 192 business loan applications and 183 home loan applications as of Tuesday, Cowell said.

So far, SBA has approved nearly $17 million for the South Fork Fire, Salt Fire and subsequent flooding, Cowell said. She said $13.5 million of that pot is for homeowners and renters.

She said if the SBA denies a loan, the applicants have six months to obtain what was missing, like an unsubmitted document.

“Especially in the case of a fire, it's very difficult to track down a lot of documents because you've got fire burning them up and then the water scattering what hasn't burned,” she said. “And so, you know, we understand that.”

Loan applications can be found online at sba.gov/disaster.

Editor's note 11/4/24 10 a.m.: This article has been updated following Biden's declaration of Roswell as a major disaster area late Friday afternoon.