Baton Rouge area business owners slow to apply for SBA disaster loans
In the three weeks since the flood, the Small Business Administration has approved just over $170 million in low-interest loans to help businesses and individuals begin the rebuilding process. But only $13.1 million of the total approved has gone to businesses. The vast majority of the funds—$157.3 million—has gone to individuals.
The reason for the disparity is not because businesses are being denied loans. They’re just not applying for help. Of the more than 13,300 loan applications the SBA has received, just 1,036—less than 8%—have come from business owners.
SBA Public Information Officer Michael Flores says he’s not sure why more business owners aren’t lining up to take advantage of the program. But he suspects many are putting off the application process because they are still preoccupied with their flood-damaged houses and vehicles.
While that is to be expected, Flores encourages affected business owners to register with the SBA now, even if they don’t think they will need help. The window for applications closes Oct. 13, and after that it will be too late to take advantage of the program.
As many as 12,000 businesses in the Capital Region are located in flood-affected areas, according to recent estimates by the Baton Rouge Area Chamber. The SBA will loan businesses up to $2 million at a 4% fixed rate. Those loans may be used to cover some relocation expenses if a business is forced out of its existing location. Investors with rental property are also eligible for the business loans.
Flores says the SBA is proud that it has already approved $170 million. It shows “help is getting to those who need it,” he says.
But he encourages others who need help to take advantage of the resources while they can, and begin the application and approval process. The SBA has established business recovery centers around the area, and is also manning tables at the 24 Federal Emergency Management Agency disaster recovery centers in the state.