SBA requests loans to offset business losses in Puerto Rico
SAN JUAN — The U.S. Small Business Administration (SBA) is working with the Federal Emergency Management Administration (FEMA) to provide low-interest loans to homeowners, leaseholders and small businesses that suffered losses due to Hurricane María.
To request aid, storm victims must register with FEMA on their website, via phone at 1-800-659-2955 or in person with SBA representatives at the Pedro Rosselló Convention Center, currently operating as the government’s command center.
The information was provided by John “Jack” Camp, SBA specialist in Public Affairs.
“We are increasing our presence and access to communities. Wherever you find FEMA, you will find the SBA,” Camp said.
Individuals or businesses have up to two months after the emergency was declared to file their request. In this case that date would be Sept. 21, the day after the Category 4 storm hit the island.
There are three types of loans available: to compensate for physical damages caused by the emergency; for financial losses to cover ordinary and necessary financial obligations; and home disaster relief.
If approved, these loans would allow their recipients to cover 100 percent of uninsured losses.
Loans for physical damages and financial losses up to $2 million are available for businesses of of all sizes. This includes spiritual centers, nonprofits, and cooperatives or farming businesses.
The SBA is also offering loans to homeowners and renters. “Homeowners can borrow up to $200,000 and homeowners and renters can borrow up to $40,000 for lost personal property,” Camp said.
The agency allows 30 years to repay these loans, but the repayment terms will vary according to each individual’s ability to pay.
However, the law limits the repayment term to seven years for loans granted to small businesses and loans covering economic losses for entrepreneurs with access to other credits.
“For homeowners and leaseholders, interests are as low as 1.750 percent,” Camp said.
In the case of business loans, interest ranges from 3.305 percent to 6.61 percent, while for non-profit organizations the lowest interest rate is 2.5 percent.
Camp said he didn’t know how many businesses or individuals have requested loans in Puerto Rico. The SBA is filing out requests at the Convention Center “and we hope anyone interested in receiving our assistance comes here and speaks to our representatives,” he maintained.
To qualify, the applicant must have an acceptable SBA credit history and ability to pay. Collateral is required for physical loss or economic loss loans of $25,000 or more. SBA will not reject a loan for lack of collateral but the applicant is required to offer what he or she has available.
If the request is approved, the applicant may be eligible for additional funds to cover improvement costs in order to protect their property from future damages or mitigation.
The SBA can also help refinance all or part of a previous mortgages or preventive bail. The SBA disaster loan can also be used by the applicant to relocate.
Moreover, cooperatives on the island that offer commercial loans have emergency loans available with low interest rates for both individuals and businesses. These allow people to request cash immediately in order to resolve their emergency situation, explained Ivelisse Torres, who is president of the Cossec Board of Directors.
Economic Development and Commerce (DDEC by its Spanish acronym) Secretary Manuel A. Laboy Rivera reported that the Operations Center for Puerto Rico’s Economic Sector is still active, working out of the Sheraton Hotel in San Juan.
“Ricardo Rosselló’s administration continues to work on the economic recovery of Puerto Rico along with the private sector. We have created alliances with this important sector to jointly raise Puerto Rico. A representative was designated for each sector to attend the concerns and needs of their industry during Puerto Rico’s state of emergency,” said Laboy Rivera, who is also the executive director of the Puerto Rico Industrial Development Co. (Pridco). He added that his agency inspected a large part of the inventory located in Pridco’s properties that may have suffered damages.
Laboy Rivera stressed that personnel from both agencies are working with the business community and providing guidance on the DDEC’s Economic Recovery Program, with particular emphasis on Small and Midsize Businesses from the manufacturing, technology and export sectors. In this program, “businesses can request emergency incentives of up to $25,000 to acquire equipment to generate electricity and up to $10,000 to acquire raw materials,” the official explained.
The Economic Development secretary noted that this is being managed in coordination with the Economic Development Bank, the Trade & Export Co. and the SBA.