[Code of Federal Regulations]

[Title 13, Volume 1]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 13CFR123.202]



[Page 351-352]

 

                TITLE 13--BUSINESS CREDIT AND ASSISTANCE

 

                CHAPTER I--SMALL BUSINESS ADMINISTRATION

 

PART 123_DISASTER LOAN PROGRAM--Table of Contents

 

               Subpart C_Physical Disaster Business Loans

 

Sec. 123.202  How much can my business borrow with a physical disaster 

business loan?



    (a) Disaster business loans, including both physical disaster and 

economic injury loans to the same borrower, together with its 

affiliates, cannot exceed the lesser of the uncompensated physical loss 

and economic injury or $1.5 million. Physical disaster loans may include 

amounts to meet current building code requirements. If your business is 

a major source of employment, SBA may waive the $1.5 million limitation. 

A major source of employment is a business concern which has one or more 

locations in the disaster area which:

    (1) Employed 10 percent or more of the entire work force within the 

commuting area of a geographically identifiable community (no larger 

than a county), provided that the commuting area does not extend more 

than 50 miles from such community; or

    (2) Employed 5 percent of the work force in an industry within the 

disaster area and, if the concern is a non-manufacturing concern, 

employed no less than 50 employees in the disaster area, or if the 

concern is a manufacturing concern, employed no less than 150 employees 

in the disaster area; or

    (3) Employed no less than 250 employees within the disaster area.

    (b) SBA will consider waiving the $1.5 million loan limit only if:

    (1) Your damaged location or locations are out of business or in 

imminent danger of going out of business as a result of the disaster, 

and a loan in



[[Page 352]]



excess of $1.5 million is necessary to reopen or keep open the damaged 

locations in order to avoid substantial unemployment in the disaster 

area; and

    (2) You have used all reasonably available funds from your business, 

its affiliates and its principal owners (20% or greater ownership 

interest) and all available credit elsewhere (as described in Sec. 

123.104) to alleviate your physical damage and economic injury.

    (c) Physical disaster business borrowers may request refinancing of 

liens on both damaged real property and machinery and equipment, but for 

an amount reduced by insurance or other compensation. To do so, your 

business property must be totally destroyed or substantially damaged, 

which means:

    (1) 40 percent or more of the aggregate value (lesser of market 

value or replacement cost at the time of the disaster) of the damaged 

real property (including land) and damaged machinery and equipment; or

    (2) 50 percent or more of the aggregate value (lesser of market 

value or replacement cost at the time of the disaster) of the damaged 

real property (excluding land) and damaged machinery and equipment.

    (d) Loan funds allocated for repair or replacement of landscaping or 

recreational facilities may not exceed $5,000 unless the landscaping or 

recreational facilities fulfilled a functional need or contributed to 

the generation of business.



[61 FR 3304, Jan. 31, 1996, as amended at 63 FR 46644, Sept. 2, 1998]