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Homeowners, renters, businesses damaged by flood can tap into Small Business Administration funds

The Federal Emergency Management Agency representatives will leave Bemidji this afternoon, but the U.S. Small Business Administration is still on hand to help people whose property was damaged by spring flooding.

However, the deadline to apply for SBA loans is June 9. The local office is at 505 Bemidji Ave.

Although SBA has the word "business" as part of it title, Public Information Officer Richard Daigle said the agency also helps homeowners and renters. In a telephone interview from Moorhead, Minn., he explained that FEMA provides grants, usually in relatively small amounts.

"That's money you don't need to give back," Daigle said. "We have the deep pockets. We can provide a homeowner up to $200,000 and up to $40,000 for contents."

Renters, because they don't own their homes, can be eligible for up to $40,000 for contents only. The loans carry an interest rate as low as 2.1 percent for up to 30 years, he said. Businesses can apply for up to $2 million at 4 percent interest for physical and economic damages. Economic injury disaster loans provide necessary working capital until normal operations resume after a physical disaster.

Daigle used the example of a donut shop sitting high and dry, but nobody is buying donuts because they're too busy sandbagging.

After a person applies for the loans, Daigle said an SBA agent will assess the damages, subtract insurance allowances and FEMA grants and offer the difference. However, because of the looming application deadline, people shouldn't wait for insurance to pay out before applying for SBA loans.

"By applying for the SBA loan, they have the option of using the loan if they need it," he said. "They don't have to take the whole loan."

He also encouraged people in flood areas to apply, even if they think their property isn't damaged, in case trouble, such as mold, turns up later.

If someone thinks the loan is not enough to repair the damage, he or she can appeal the decision, Daigle said.

SBA's disaster loans are the primary form of federal assistance for nonfarm, private sector disaster losses. Providing disaster assistance in the form of a loan rather than a grant, avoids creating an incentive for property owners to underinsure against risk.

SBA tailors the repayment of each disaster loan to the borrower's financial capability.

"Every individual situation is different and unique," Daigle said.

For more information, visit SBA's Web site at, call the Customer Service Center at 800-659-2955, or by e-mail at