Here's How L.A. Small Businesses Can Get $2 Million In Help

Forbes

The SBA is authorized to provide up to $2 million in low-interest-rate, long-term disaster loans per business to cover physical or economic damage. But the agency depends on Congress to replenish its funds.  Read the full story on Forbes: https://www.forbes.com/sites/brandonkochkodin/2025/01/13/la-fires-sba-disaster-loans/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

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00:00Today on Forbes, how L.A. small businesses can get $2 million in help, even if they weren't burned.

00:09Last Tuesday morning, the first of the wildfires broke out in the Pacific Palisades neighborhood of Los Angeles,

00:15tearing through dry brush in the Santa Monica Mountains.

00:19As of Sunday, the Palisades fire was still spreading, and four major blazes had burned nearly 40,000 acres in the L.A. area,

00:27taking at least 24 lives, destroying or damaging more than 12,000 structures,

00:33and causing economic damages now estimated at up to $150 billion.

00:39The Palisades, with its canyon and ocean views, was known for its high-end houses,

00:44ranging from sleek modern designs to classic California Spanish-style estates.

00:50Another devastated neighborhood, Altadena, 35 miles to the east,

00:54had some more modest homes that families had owned for generations.

00:59But the fire hasn't just cost lives and leveled housing.

01:02It's also taken out thousands of shops and restaurants, and damaged the business prospects of those still standing.

01:09In the Palisades 90272 zip code alone, there were more than 1,000 businesses before the fire.

01:16Across Southern California, business owners, and particularly those dependent on local customers,

01:22now face the tough decision about whether to rebuild and reopen,

01:26gambling that demand will recover quickly enough to make it worth the risk.

01:30Some restaurants destroyed by the fires are already looking for community support to rebuild.

01:36Fox's, a diner in Altadena with roots stretching back to 1955,

01:40and The Real Inn, a casual seafood spot in Malibu,

01:44are among those that have started GoFundMe campaigns to help their employees,

01:48this according to the Los Angeles Times.

01:51Fox's has already raised $34,555, and The Real Inn, $135,337.

02:00But many longtime patrons are likely now struggling themselves.

02:05The Small Business Administration's, or SBA's, disaster loan program

02:09could offer a longer and more substantial lifeline to help the restaurants reopen.

02:14It provides direct loans of up to $2 million at rates as low as 4% to businesses

02:19that have suffered physical damage or economic losses from a declared disaster.

02:24Eligible businesses include not only those scorched by the fire,

02:28but also some indirectly impacted,

02:30like suppliers or businesses that rely on devastated neighborhoods for customers.

02:35Among the benefits of SBA direct disaster loans

02:38is interest doesn't start to accrue until a year after the business gets the money.

02:43Surprisingly, nonprofits and even individual homeowners and renters

02:47can also qualify for SBA disaster loans,

02:50with rates as low as 3.625% for nonprofits and 2.563% for homeowners and renters.

02:58Homeowners can borrow up to $500,000 to fix or replace their primary residences,

03:03while homeowners and renters can borrow up to $100,000 to replace personal property.

03:09These loans are meant to cover what insurance doesn't.

03:12The SBA's disaster loan program, started in 1953,

03:16now makes two main types of loans available to businesses,

03:20physical damage loans and economic injury loans.

03:24Physical damage loans can provide up to $2 million

03:26to repair or replace buildings, equipment, or inventory.

03:30Economic injury loans can help with day-to-day expenses

03:34when sales drop after a disaster, and also have a limit of $2 million.

03:39A business can apply for both loans,

03:41but total borrowings are normally capped at $2 million

03:45regardless of whether a business uses one or both programs.

03:49The SBA loans can be repaid over as long as 30 years,

03:52giving a rebuilding business plenty of time to get back on its feet.

03:56These are direct loans, not loan guarantees,

03:59meaning that applicants don't have to get approval from a local bank.

04:03But they do need to have adequate credit scores

04:05and to put up collateral for loans over $25,000.

04:09The deadline to apply for a physical damage loan,

04:12due to the fires in Los Angeles, is March 10th.

04:15For an economic injury loan, it's October 8th, 2025.

04:19But both deadlines could be extended,

04:21depending on how long it takes to fully extinguish the fires

04:24and for Congress to allocate any needed additional funds to the program.

04:29For full coverage, check out Brandon Kokonen's piece on Forbes.com.

04:35This is Kieran Meadows from Forbes.

04:37Thanks for tuning in.

04:42For more information, visit www.forbes.com

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