As Hurricane Helene survivors mark one month since the storm hit, and long-term recovery continues in Western North Carolina, this client alert addresses financial resources for businesses.
FEMA Grants Available for Private Nonprofits
Certain private nonprofit organizations, including houses of worship, are eligible for disaster grants under the Federal Emergency Management Agency’s (FEMA) Public Assistance Program. To qualify, nonprofits must hold (1) a ruling letter from the U.S. Internal Revenue Service granting tax exemption under sections 501(c), (d), or (e) of the Internal Revenue Code and (2) own or operate a facility that provides a critical service, such as education, utilities, emergency response, or medical care, or noncritical but essential social services provided to the general public. More information is available here, https://www.fema.gov/assistance/public, with details on eligibility published here, https://www.fema.gov/sites/default/files/documents/fema_pappg-v4-updated-links_policy_6-1-2020.pdf.
Golden LEAF Grants and Bridge Loans
Golden LEAF, a North Carolina organization dedicated to rural economic opportunity, also is making grants available to 501(c)(3) nonprofits. These funds are available to support immediate relief and unmet needs. More information is available here: https://goldenleaf.org/helene-relief/.
In its recently enacted Disaster Recovery Act of 2024 – Part II, the North Carolina General Assembly appropriated $50,000,000 to Golden LEAF to administer bridge loans for small businesses. Businesses may borrow up to $100,000 at an interest rate of no more than one percent (1%) during the twelve-month interest only period and six percent (6%) thereafter. The loan term is six years, through June 30, 2030. The application period for the bridge loans has not yet opened. Once available, more information is likely to be posted here: https://goldenleaf.org/helene/.
SBA Disaster Loans Available for Businesses
Homeowners, renters, and businesses recovering from Hurricane Helene should consider seeking disaster response funding made available by the Small Business Administration (SBA).
SBA disaster loans primarily involve two categories of funding: loans for physical damage and loans for economic injury. All disaster loans involve delayed interest accrual and delayed repayment requirements. SBA applications also may be approved—up to $50,000—without collateral. There are no fees to apply and even if you are approved, there is no obligation to accept part or all of the loan. However, individuals and businesses with access to credit elsewhere receive less favorable treatment than those without other credit options. The tables below detail the terms of disaster loans available.
Physical Disaster Loans – Deadline November 27, 2024
|
Loan Type |
Loan Amount |
Loan Term |
Interest Rate |
||
|
No Credit Available Elsewhere |
Credit Available Elsewhere |
No Credit Available Elsewhere |
Credit Available Elsewhere |
||
|
Home Loans |
Up to $500,000 |
Up to 30 years irrespective of credit availability elsewhere |
2.813% |
5.625% |
|
|
Business Loans |
Up to $2,000,000 |
Up to 30 years |
Up to 7 years |
4.000% |
8.000% |
|
Non-Profit Loans |
Up to $2,000,000 |
Up to 30 years |
Up to 7 years |
3.250% |
3.250% |
Economic Injury Disaster Loans – Deadline June 30, 2025
|
Loan Type |
Loan Amount |
Loan Term |
Interest Rate |
||
|
No Credit Available Elsewhere |
Credit Available Elsewhere |
No Credit Available Elsewhere |
Credit Available Elsewhere |
||
|
Businesses & Small Agricultural Cooperatives |
Up to $2,000,000 |
Up to 30 years |
Up to 7 years |
4.000% |
N/A |
|
Non-Profit Loans |
Up to $2,000,000 |
Up to 30 years |
Up to 7 years |
3.250% |
N/A |
No loans may exceed a business’ verified loss amount as determined by an SBA loss verification officer. While the combined amount of any SBA disaster financing may not exceed $2,000,000 for a business and its affiliates, if an application is approved, mitigation financing up to an additional $500,000 may be available for improvements to protect property against future damage.
Deferment
Additional economic relief may be available in the way of deferments and restructuring for those impacted by the disaster. Prior mortgages also may be refinanced by SBA. Eligibility requires a showing of (1) an absence of credit available elsewhere, (2) substantial uncompensated damage (40% or more of the property or 50% or more of the structure), and (3) intent to repair.
Applications
The SBA has encouraged eligible borrowers to submit applications as soon as practicable, even though funding for new disaster loans currently is exhausted, because SBA expects Congress to provide additional funds. See https://www.sba.gov/article/2024/10/15/sba-exhausts-funds-new-disaster-loans.
Applications for SBA disaster assistance may be submitted online (DisasterAssistance.gov), over the phone (800-621-3362), or in person at an established disaster recovery center. Several centers are operating across Western North Carolina with details on location and hours available here: https://egateway.fema.gov/ESF6/DRCLocator.
Brooks Pierce joins many other communities and organizations in recognizing the extreme impacts of Hurricane Helene and the great recovery effort required. For attorneys and paralegals interested and able to lend pro bono services, add your name with ours at https://www.ncbarfoundation.org/our-programs/disaster-legal-services/disaster-legal-services-volunteer-sign-up-form/#content (NC attorneys) or https://www.ncbar.gov/news-publications/news-notices/2024/10/supreme-court-allowing-non-nc-lawyers-to-provide-pro-bono-legal-services-to-helene-victims/