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U. S. SMALL BUSINESS ADMINISTRATION FACT SHEET - DISASTER LOANS
When you visit with the SBA which I believe you have because now you are looking for answers to questions you should have asked before visiting with FEMA.
The number one question: "Do I have to apply for an SBA loan to get FEMA assistance or grants?" if you ask 70% of FEMA workers they will tell you Yes. If you read Federal Assistance and the Delivery of this Assistance you would see you have to. But if you read Congressional laws passed years ago you will see that FEMA is it's own agency and the SBA is it's own agency and part of the executive branch of government. They do not have to respond to each other and do not use the same policies and procedures. They are simply ordered by Congress to tell disaster victims about a federal low program called "SBA Disaster Loans."
Now that you know you were told incorrectly about what the SBA loan was going to do for you. Let me continue with this article about why you should not ever apply to the SBA if you have good income and good credit.
"MAY I HAVE SOME MORE DISASTER DEBT PLEASE."
When you have good credit and good income you're going to be told you will qualify for an SBA Disaster loan. They will tell you about the interest rates but wont tell you that about 20 private lenders in the area are ready to offer you disaster loans for about point or two more without the Federal Assistance Duplication of Benefits strings attached.
You have Credit Elsewhere when you have good credit and congress knew this when it passed the law that required the SBA to charge you market rates. No special rates for the good credit and good income households. So why do you still look to the SBA for disaster loans?
It's because they are fast. Well, that's what they say, we have seen reports of 3 months, 6 months and sometimes a bit longer. The idea you needed the money fast to repair your home just doesn't float when it comes to the grant reimbursement programs you will not qualify for because of your urgent need for a SBA loan.
Your credit vs. my credit is this, I would pay, 1.563 percent on every dollar and you would pay 3.125 percent. You pay double of what I would pay in interest. It's because a local bank would decline my loan application, you are needed in the system to increase investor returns. Could you imagine of congress allowed the SBA to give loans that were all for 1.563 percent? No investor in their right mind would give money to the SBA programs.
Wait, you thought this was all taxpayer money? Sorry, no, this is money from private investors and lending companies. The taxpayers money is only the security that the investor will get 100% of the investment back plus interest. So it's not anything "Patriotic" about taking an SBA loan. In fact, it's more like supporting the wealthy and congress at the same time. Not to mention you just terminated other assistance that you might be looking at today.
Let's start with "Say No" to SBA if you are poor, low income, moderate income. Let's then say no if you are above average income with good credit. Then if you are middle American and that famously shrinking middle class you have to weigh your needs which is a completely different topic I talk about in other articles.
Credit Elsewhere? Then Go Elsewhere for your Disaster Recovery Loans and don't even talk to the SBA.