Recently, major wildfires have struck multiple locations in the western United States, causing significant property damage and economic impacts. Currently, the Small Business Administration (SBA) in the United States has swiftly rolled out a series of loan initiatives specifically for the victims in Los Angeles County and four other counties to assist them in recovering and resuming their normal lives and operations. Senior Chinese-American SBA commissioner Guo Manli provided detailed information to a local newspaper about the key features of these loan policies, offering loan advice to New York residents who are often affected by hurricanes and floods.
Unlike California wildfires, natural disasters in New York primarily stem from hurricanes, with the most recent being Hurricane Ida that struck on September 1, 2021. At that time, approximately 18 people in New York State died, including at least five Chinese individuals, with Queens in New York City being one of the hardest-hit areas, affecting the homes and small businesses of many Chinese residents.
Following the disaster, the Federal Emergency Management Agency (FEMA) and SBA approved $279.9 million in federal aid to assist affected New York residents. However, many Chinese individuals were unable to benefit due to a lack of understanding regarding the purposes and application methods of this aid.
Guo Manli recommended that New Yorkers familiarize themselves with the loan policies, advising them to apply for loans promptly in the event of a disaster to ensure they make the most of government resources to overcome difficulties.
She pointed out a significant difference between New York and California, where most Californians have credit records, while many small business owners or enterprises in New York lack such records. Therefore, California tends to benefit more in obtaining SBA loans compared to New York.
During Hurricane Ida in New York, many people in the Chinese community were initially reluctant to borrow money. Guo Manli strongly suggests that disaster victims prioritize applying for SBA loans, emphasizing that individuals must first demonstrate their inability to obtain assistance from SBA before seeking other forms of aid with the rejection letter as proof.
Guo Manli highlighted the close cooperation between SBA and FEMA in post-disaster loan policies, with FEMA primarily responsible for providing temporary housing and essential living items to victims, while SBA handles subsequent loan support. After being denied an SBA loan, victims can use the rejection letter to apply for further assistance from FEMA, such as help with repaying bank loans.
For those concerned about repayment difficulties, in the face of a major disaster, it may be possible to negotiate repayment plans. Guo Manli mentioned, “For example, after the economic losses loans due to the outbreak of the COVID-19 pandemic, some businesses or residences that could not return to normal operation were granted a minimum monthly repayment of 25%.”
1. Housing Disaster Loans
These loans target homeowners and property owners who rent out properties, used for home repairs or relocation to another location. This loan also covers compensation for damaged furniture, vehicles, etc.
2. Business Physical Disaster Loans
These loans are for businesses’ real estate and its associated properties, equipment losses, covering all sizes of enterprises including small businesses, private nonprofits (such as churches, charitable organizations, private universities), etc. These loans are for repairing and replacing physically damaged properties like homes, vehicles, etc.
3. Business Economic Injury Loans
These loans are mainly for small businesses, small agricultural cooperatives, small enterprises engaged in aquaculture, and nonprofit organizations of various sizes, aimed at helping businesses pay for daily expenses such as rent and employee salaries to survive the recovery period post-disaster.
The distinguishing feature of the above loans is that the interest rates are much lower than standard bank loans, with a rate of 2.563% for housing disaster loans, loan terms up to 30 years; 4% for commercial loans; and 3.625% for nonprofit organization loans.
Guo Manli emphasized that victims should apply for loans promptly as congressional funding is limited and once exhausted, it is uncertain when new funding will be allocated next. Even if applicants are approved for a loan, they have the right to choose not to accept it, so she encourages everyone to actively apply to ensure they make the most of government resources to weather the storm.
If there are any questions, Guo Manli welcomes everyone to contact her via text at 202-815-2859 or email at man-li.lin@sba.gov (both Chinese and English are acceptable). ◇