SBA Disaster Loan Program the Duplication of Benefits story you heard when it was too late.
Once you sign your SBA loan agreement for your disaster loan you also signed away any Grant money that you may have been eligible for at a later date. The key is never take a loan when you qualify for a grant but the grants come after the loans.
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By Murray Wennerlund published 1-15-2022 updated 2-14-2022
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When you start the recovery process FEMA will instruct you to apply for an SBA loan. They may also tell you that you will not qualify for Other Needs Assistance (ONA) if you don't apply for a loan. Your list of ONA comes from your governors office and that would tell you the value and items that are covered. Compare assistance and what it is for before you take an SBA loan.

FR-2019-06-20:

"FEMA regulations at 44 CFR 206.191 set forth a delivery sequence that establishes which source of assistance is duplicative for certain programs. CDBG-DR assistance is not listed in FEMA's sequence, but as a practical matter, CDBG-DR assistance duplicates other sources received before the CDBG-DR for the same purpose and portion of need. Any amount received from other sources before the CDBG-DR assistance that is determined to be duplicative must be collected by the grantee. The mandatory agreement to repay (discussed in VII. below) can be used to prevent duplication by assistance that is available, but not yet received. If the duplicative assistance is received after CDBG-DR, the grantee must collect the DOB or contact HUD if it has questions about whether another Federal agency is responsible for collecting the duplication.

VII. Agreement To Repay
The Stafford Act requires grantees to ensure that applicants agree to repay all duplicative assistance to the agency providing that Federal assistance. To address any potential DOB, each applicant must also enter into an agreement with the CDBG-DR grantee to repay any assistance later received for the same purpose for which the CDBG-DR funds were provided. This agreement can be in the form of a subrogation agreement or similar document and must be signed by every applicant before the grantee disburses any CDBG-DR assistance to the applicant."