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Businesses Denied Disaster Loans Still Have Options

By Christina Haley O'Neal, posted Oct 29, 2018
Some local businesses are starting to see denials for SBA disaster loans, but officials with the Small Business & Technology Development Center are urging owners not to give up.

The SBTDC's Wilmington office has ramped up operations since Hurricane Florence to help business owners understand loan options and what may be best for their specific situations, said Heather McWhorter, regional director of the SBTDC Center at 803 S. College Road, Suite A, in Wilmington.

Within the last week, McWhorter said business owners have been coming into the center worried that their operation might fail because of a loan denial following the storm's impacts in mid-September.

McWhorter said her message is there might still be options out there for recovering firms.

"This is impacting all the industry sectors really that we are seeing," McWhorter said. “Because they [businesses] applied online without maybe understanding the process or understanding all the parameters of what their 2017 tax returns need to look like, or which disaster loan is best for them in the situation that they're in, they're getting that denial.

"My message is that if they get the denial, it's not the end.”

The SBTDC is able to work with businesses to keep pushing for the financial aid they need through the Small Business Administration (SBA) and to look long term, she said.

So far, the SBTDC has helped 220 businesses locally with disaster assistance from Hurricane Florence, as part of the center’s business recovery services, she said.

SBA provides low-interest disaster loans for homeowners, renters, businesses and nonprofits, according to the SBTDC Hurricane Florence informational page.

There are two types of SBA loans available, McWhorter said, which are physical injury and economic injury.

Statewide, as of the most recent numbers available, the SBA has granted $18.8 million in business disaster assistance loans, $3.6 million in New Hanover County alone. The agency has also approved 5,300 home loans, 736 of those in New Hanover.

The deadline to apply for SBA disaster assistance loans is Nov. 13 for physical injury. The deadline for an economic injury loan is June 14, according to SBA officials.

Those who have applied online and who have been denied can go to the SBTDC for help to reapply, McWhorter said. Businesses have six months to apply again, and they could apply up to two more times for an SBA loan, she said.

“So if they get a denial from SBA, what we can do is we can look at why they were denied, and to see if there are ways to address why they were denied to put together maybe a better application, maybe ask for less money," she said. "I’m not promising a silver bullet at all, but I don’t want a business to give up because they got a denial. I want them to come in and talk with us to see if there is anything else.”

There is a "fairly significant amount" of businesses that get approved when reapplying for SBA loans for reconsideration, said Carl Dombek, a spokesman with the SBA.

"If you are declined the first time you have six months to ask for reconsideration," Dombek said. "They may have forgotten something ... so to request reconsideration gives us another look at things."

It also goes to a different loan officer for reconsideration, so "they dig into it from the ground up," he added. "It's an important facet of our program."

In addition to loan assistance, the SBTDC is also aiding marketing campaigns to get business back in peoples’ doors, as well as looking into other loan options for businesses still struggling to recover from the hurricane.

One other option is a Rapid Recovery loan from Thread Capital, the N.C. Rural Center’s lending arm, which offers up to a $50,000 disaster loan, McWhorter said.

“If they're waiting on an insurance payment and they just need an influx of cash right now to survive while they're waiting for that insurance payment, that's a really good option for them in that situation,” she said.

Greater Wilmington Business Journal Assistant Editor Cece Nunn contributed to this report. 
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