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Update, September 14: Article continues to be updated to incorporate information about one additional county that's eligible for disaster relief loans and three more counties which are eligible to receive economic injury loans.
Businesses physically impacted by the wildfires in nine northern California counties declared to become major disaster areas are now able to receive low-interest federal loans through the Small Business Administration (SBA). Support for businesses in 17 adjacent counties is also available — those businesses may apply for economic injury loans.
These educational funding tools were put in place after President Trump approved assistance for hurt individuals and businesses in the Lake, Napa, San Mateo, Santa Cruz, Solano, Sonoma, and Yolo counties on August 22. Monterey County was later added to the list. Update, September 14: The Federal Emergency Management Agency (FEMA) added Butte county towards the list on September 13.
Businesses within the eight impacted counties are eligible to receive federal funding as high as $2 million, per the SBA’s fact sheet [PDF]. Should a business receive funds through the SBA, it can make use of the cash to “repair or replace disaster-damaged property.” The SBA defines physical damage as including property, inventories, supplies, machinery, and equipment.
Any sized business may affect receive funding through the federal physical disaster program. Additionally, private, non-profit organizations (which include, but aren't limited to charities, churches, and private universities) are also eligible.
Because the SBA is doling out loans towards the impacted area (as opposed to grants), businesses will need to repay any funds received with interest. However, the interest rate is quite low: 3% for businesses without any credit elsewhere and 6% for businesses that will have other lines of credit. Non-profits will get an even lower interest rate of 2.75%.
Loan terms can reach up to a maximum of 30 years for businesses without additional credit and seven years for businesses with other credit sources. The precise term length is based on each borrower’s ability to repay their loan.
The 17 contiguous counties also entitled to funding include Alameda, Colusa, Contra Costa, Fresno, Glenn, Kings, Marin, Mendocino, Sacramento, San Benito, Bay area, San Luis Obispo, Santa Clara, and Sutter. Update, September 14: FEMA added the Plumas and Yuba counties towards the list on September 13. Tehama county has additionally been added.
Businesses within those counties can use for a financial loan as high as $2 million through the SBA’s Economic Injury Disaster Loan (EIDL) program. Unlike the loans available for businesses located in the nine disaster counties, EIDL loans can’t be utilized for damage to property; instead, the funds must be used to satisfy “necessary financial obligations that can't be met like a direct consequence of the disaster.”
EIDL loans have similar interest rates to the physical disaster loans: 3% for businesses and a pair of.75% for non-profits.
How To Apply For California Wildfire Disaster Relief Loans
California businesses thinking about applying for federal relief may do so via the SBA website. Applications for physical disaster relief loans can also be downloaded and mailed to the SBA:
U.S. Small Business Administration, Processing and Disbursement Center
14925 Kingsport Road, Fort Worth, TX 76155
To obtain a loan with the SBA, businesses have to:
- Create a merchant account inside the SBA’s disaster loan assistance portal (this process requires the applicant’s Ssn).
- Answer several questions to find out eligibility, loan type, and reason for aid.
- Fill the disaster relief application (this requires such information as damaged property addresses, estimated loss, and insurance information).
- Fill out an IRS form to request the business’ tax transcript (the SBA will use this transcript to look for the applicant’s repayment ability).
Depending on the type of business, applicants can also be necessary to fill out additional forms.
For Further Assistance:
Call the SBA’s customer support at (800) 659-2955 or email the SBA at disastercustomerservice@sba.gov. The SBA also provides customer support for the deaf or hard-of-hearing — for your line call (800) 877-8339.
The application window for physical disaster loans closes on October 21, 2022. Your window for EIDL applicants closes on May 24, 2022.
Businesses will have to meet certain credit requirements set by the SBA in order to be entitled to a loan through either program. Businesses must:
- Have an acceptable credit history as deemed through the SBA
- Show the opportunity to repay all loans
- Provide collateral on loans above $25,000 (collateral may include property)
Other Avenues For Financial Relief
Because the recession generated by COVID-19 has established its own, ongoing economic damage, businesses influenced by the California wildfires might have difficulty finding other funding streams. However, there are a handful of places worth looking.
You may find support with the California Labor Federation’s page focused on wildfire disaster relief. The California Community Fund also operates a webpage for wildfire relief grants.
Additionally, you (or perhaps your employees) may qualify for tax relief. Browse the IRS’s website to learn more.
