The past couple of weeks have been a trying time for Texas and our country. The U.S. Small Business Administration along with other federal, state and local agencies are continuing to work around the clock to aid those impacted by Hurricane Harvey.
As recovery efforts begin in Texas and Louisiana, it is clear the damage and devastation from Harvey will reach historic levels. Homes, businesses and lives have been uprooted by the sheer force of nature, affecting millions of people.
After the Federal Emergency Management Agency, the SBA is the federal government's primary source of money to help homeowners, renters, businesses and nonprofit organizations recover from disasters.
Effective immediately, SBA Administrator Linda McMahon is authorizing and encouraging SBA lenders and certified development companies to offer up to 12-month deferment of principal and interest payments on business loans for customers located in counties designated as federal disaster areas. That means that those with existing SBA business loans will have some relief during recovery.
So far the SBA has approved $204,032,000 in federal disaster loans for Texas businesses and residents impacted by Harvey. A total of 176 loans were approved for $16,390,000 to businesses and 2,191 loans worth $187,507,600 for residents to help rebuild and recover from this terrible disaster.
Businesses of all sizes and private nonprofits may borrow up to $2 million to repair or replace damaged or destroyed real estate, machinery and equipment, inventory and other business assets. The SBA can lend additional funds to help businesses and residents with the cost of making improvements that protect, prevent or minimize the same type of disaster damage from occurring in the future.
For small businesses and most private nonprofits of all sizes, SBA offers Economic Injury Disaster Loans to help meet working-capital needs created by the disaster. Economic injury assistance is available regardless of whether the business suffered any property damage.
Disaster loans up to $200,000 are available to homeowners to repair or replace their damaged or destroyed primary residence. Homeowners and renters are eligible for up to $40,000 to repair or replace damaged or destroyed personal property.
Any businesses and residents with sustained damage are encouraged to register with FEMA at www.disasterassistance.gov or apply for SBA assistance at https://disasterloan.sba.gov/
Completed applications should be mailed to U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
Surety bond program increases contract opportunities for small businesses
There are two important changes to SBA's Surety Bond Guarantee Program. These changes will increase contract opportunities for small contractors, supporting them to grow their business operations. The changes become effective Sept. 20, 2017.
The SBA will increase the guarantee percentage in the Preferred Surety Bond Program from no more than 70 percent to no more than 90 percent. The SBA's guarantee will be 90 percent if the original contract amount is $100,000 or less, or if the bond is issued to a small business that is owned and controlled by socially or economically disadvantaged individuals, veterans, service disabled veterans, or certified HUBZone and 8(a) businesses. All other guarantees will be 80 percent.
The eligible contract amount for the Quick Bond Application will increase to $400,000 from $250,000. The Quick Bond is a streamlined application process, with reduced paperwork requirements, that is used in the Prior Approval Program for smaller contract amounts. SBA's review and approval require minimal time, allowing small businesses to bid on and compete for contracting opportunities without delay.
Through its SBG program, consisting of the Prior Approval and the Preferred Surety Bond programs, SBA guarantees bid, payment and performance bonds for contracts that do not exceed $6.5 million, and up to $10 million with a federal contracting officer's certification. The SBA's guarantee encourages the surety company to issue a bond that it would not otherwise provide for a small business.
As of June 30, the Dallas-Fort Worth District has provided 178 bond guarantees to 40 small businesses for a total contract value of $188,372,484.83.
Ahmad Goree is chief of the Marketing and Outreach Division and public information officer for the U.S. Small Business Administration's Dallas-Fort Worth District, which covers 72 counties and serves over 860,000 small businesses and an estimated 9 million residents. He can be reached at 817-684-5500 or email@example.com.