Business Physical Disaster Loans: Who Is Eligible?

There are many different SBA, or Small Business Administration, loans that could potentially benefit your business. One program is the SBA physical disaster loan program. Here are some of the eligibility requirements for this program.

Disaster Area

One criterion for eligibility is that your business be located within what has been declared a disaster area by the government. This means that if you are located in an area that has been devastated by hurricanes, floods, wildfires or some other type of natural disaster, you are likely qualified. If your business is not located within one of these areas, you would not be able to go any further with the loan process.


In addition to being located in a disaster area, your business has to actually have some type of damage. If your business is located in the disaster area but did not suffer any actual damage, you would not be able to take advantage of this program. In this case, you might be able to apply for other SBA loans but not the physical disaster loan.

Use of Money

If you plan on taking advantage of this loan, you will have to make sure that you use the money only for its designated purposes. You cannot simply take this loan and use the money for whatever you want. The purpose of this loan is to help repair or replace damaged property or equipment. The SBA wants you to be able to return your business to the condition that it was in before the disaster occurred. With this program, you can repair or replace real property, equipment, machinery, inventory, fixtures and any other business property. 

Time Requirements

In order to qualify for this loan, you will also have to work within specific time requirements. After the disaster has been declared by the government, you have a certain amount of time to apply for the loan. If you wait beyond this deadline, you will not be able to gain access to this loan program any longer. At that point, the SBA believes that you must not desperately need their help if you do not take the time to apply right away.


With this loan program, you might also be required to put up some type of collateral for the amount of money that you borrow. If the loan is for less than $14,000, then you would not have to put up any collateral. However, if you are dealing with a loan amount in excess of $14,000, you would have to put up some type of collateral for it. This could come in the form of real estate or other business property.