What is the Difference? Disaster Assistance and SBA Loans

In our last blog we discussed what is disaster assistance? Today we are comparing disaster assistance and SBA loans.

As we mentioned in our prior blog disaster assistance happens after a presidential declaration has been filed. There are a three different types of disaster assistance. You have Public Assistance, Individual Assistance, and Hazard Mitigation.

Through the Public Assistance program FEMA provides supplemental federal disaster grant assistance for debris removal, emergency protective measures, and repair or replacement of publicly owned facilities and certain private nonprofit organizations.

Individual Assistance program by FEMA provides assistance to individuals and families who have lost their homes as a result of a presidentially declared disaster. Some other things that assistance may cover are medical, dental, childcare, funeral, burial, essential household items, moving, storage, vehicle, and some cleanup items. Its important to know that assistance is not provided to small business owners, or people with secondary homes.

Hazard Mitigation program is there to help minimize future losses from a disaster. These program provides grants to state, local, tribal, and territorial jurisdictions to reduce their losses from natural hazards. These are any actions taken to reduce or eliminate long term risk to people and property.

Alright now that we know what the three basic types of disaster assistance are, how is it different than SBA loans? What are SBA loans first of all?

SBA loans also known as the small business administration offers affordable financial help to homeowners and renters in declared disaster areas. So how is this program different than disaster assistance? Well there are two words that set these two programs apart. That is grants and loans. The disaster assistance program is a grant program that does not have to be paid back. The SBA loan is a low interest loan and can provide a much higher amount than the disaster assistance program. The SBA loan can provide up to $200,000 in coverage to repair or replace your primary home to its pre-disaster condition. Disaster assistance will make your home livable but does not bring it back to the pre-disaster condition. Like the disaster assistance program SBA loans are not available on secondary or vacation homes, but certain rental properties may qualify for a business disaster loan.

So why might you decide to choose an SBA loan over disaster assistance?

- It can bring your home back to pre-disaster condition
-It will not require you to carry flood insurance in the future
- Higher amounts of coverage available

As you can see there are some big differences when it comes to disaster assistance and SBA loans. Know one ever wants to use these programs if they do not have to and having flood insurance is one way to do that. If you have questions about disaster assistance, SBA loans, or want to look at your flood insurance options please visit our website Flood Insurance Guru. You can also subscribe to our YouTube channel or like our Facebook page The Flood Insurance Guru where we do daily flood educational videos and discuss important flood issues.