The U.S. Small Business Administration continues to provide information on its resources that are available to Wisconsin residents and businesses. The following information is the latest that has been provided by the US SBA Office of Disaster Assistance.

 

Residents of 29 Wisconsin counties may be eligible for disaster unemployment for loss of income caused by the severe storms, tornadoes and flooding in Adams, Calumet, Columbia, Crawford, Dane, Dodge,
Fond du Lac, Grant, Green, Green Lake, Iowa, Jefferson, Juneau, Kenosha, La Crosse, Manitowoc, Marquette, Milwaukee, Ozaukee, Racine, Richland, Rock, Sauk, Sheboygan, Vernon, Walworth, Washington, Waukesha and Winnebago counties since June 5.

 

Additional information on Wisconsin disaster recovery can be found at www.fema.gov or http://emergencymanagement.wi.gov/. 

 

The first step is to complete the FEMA registration—even if you are a business, LLC, LLP.  That will trigger the SBA sending the SBA application package.  As an FYI, a person can have “economic injury” without having physical damage.

 

 

U. S. SMALL BUSINESS ADMINISTRATION

FACT SHEET - DISASTER LOANS

 

     

WISCONSIN #11288 & #11289

                                                                                        (Disaster #WI-00013)

For the Counties of Columbia, Crawford, Dane, Dodge, Fond du Lac, Grant, Green, Iowa, Juneau, Kenosha, Marquette, Milwaukee, Ozaukee, Racine, Richland, Rock, Sauk, Sheboygan, Vernon, Washington, Waukesha and Winnebago and for Economic Injury Only the contiguous counties of Adams, Calumet, Green Lake, Jackson, Jefferson, LaCrosse, Lafayette, Manitowoc, Monroe, Outagamie, Walworth, Waupaca, Waushara and Wood in the State of Wisconsin; contiguous counties of Allamakee, Clayton and Dubuque in the State of Iowa; and contiguous counties of Boone, JoDaviess, Lake, McHenry, Stephenson and Winnebago in the State of Illinois; and contiguous Houston County in the State of Minnesota.

 

Result of damages caused by Severe Storms, Tornadoes and Flooding

Occurred June 5, 2008 and continuing

 

Filing Deadline for applications for Physical Damage 

to homes, personal property, businesses:                                                               August 13, 2008                        

 

Filing Deadline for applications for Economic Injury:                                    March 13, 2009       

    

Whether you rent or own your own home, own your own business, or own a small agricultural cooperative located in a declared disaster area, and are the victim of a disaster, you may be eligible for financial assistance from the U.S. Small Business Administration (SBA). 

 

What Types of Disaster Loans are Available?

Home Disaster Loans – Loans to homeowners or renters to repair or replace disaster damaged real estate or personal property owned by the victim.  Renters are eligible for their personal property losses, including automobiles.

 

Business Physical Disaster Loans – Loans to businesses to repair or replace disaster-damaged property owned by the business, including real estate, inventories, supplies, machinery and equipment.  Businesses of any size are eligible.  Non-profit organizations such as charities, churches, private universities, etc., are also eligible.

 

Economic Injury Disaster Loans (EIDL) – Loans for working capital to small businesses and small agricultural cooperatives to assist them through the disaster recovery period.  EIDL assistance is only available to applicants and their owners who cannot provide for their own recovery from non-government sources.  Farmers, ranchers, nurseries, religious and nonprofit organizations are not eligible for an EIDL.

 

What are Mitigation Loans?

If your loan application is approved, you may be eligible for additional funds to cover the cost of improvements that will protect your property against future damage.  Examples of improvements include retaining walls, seawalls, sump pumps, etc.  Mitigation loan money would be in addition to the amount of the approved loan, but may not exceed 20 percent of the approved loan amount.  It is not necessary for the description of improvements and cost estimates to be submitted with the application.  SBA approval of the mitigating measures will be required before any loan increase.

 

What are the Credit Requirements?

Credit History – Applicants must have a credit history acceptable to SBA.

Repayment – Applicants must show the ability to repay all loans.

Collateral – Collateral is required for physical loss loans over $10,000 and all EIDL loans over $5,000.  SBA takes real estate as collateral when it is available.  SBA will not decline a loan for lack of collateral, but requires you to pledge what is available.

 

What are the Interest Rates?

By law, the interest rates depend on whether each applicant has Credit Available Elsewhere.  An applicant does not have Credit Available Elsewhere when SBA determines the applicant does not have sufficient funds or other resources, or the ability to borrow from non-government sources, to provide for its own disaster recovery.  An applicant, which SBA determines to have the ability to provide for his or her own recovery is deemed to have Credit Available Elsewhere.  Interest rates are fixed for the term of the loan, are determined by formulas set by law, and may vary from disaster to disaster with market conditions.  Currently (for disasters, which occurred on or after April 21, 2008) the applicable interest rates are:

                                                                                                                         No Credit Available                      Credit Available

                                                                                                                        Elsewhere                                        Elsewhere             

Home Loans                                                               2.687%                                                    5.375%

                                                Business Loans                                                       4.000%                                                    8.000%

                                                Non-Profit Organizations                        4.000%                                                    5.250%

                                                Economic Injury Loans                                           4.000%                                                    N/A

(more)

 

 

 

 

What are Loan Terms?

 

The maximum term is 30 years.  However, the law restricts businesses with credit available elsewhere to a maximum 3-years term.  SBA sets the installment payment amount and corresponding maturity based upon each borrower’s ability to repay.

 

 

What are the Loan Amount Limits?

 

Home Loans – SBA regulations limit home loans to $200,000 for the repair or replacement of real estate and $40,000 to repair or replace personal property.   Subject to these maximums, loan amounts cannot exceed the verified uninsured disaster loss.

 

Business Loans – The law limits business loans to $1,500,000 for the repair or replacement of real estate, inventories, machinery, equipment and all other physical losses.  Subject to this maximum, loan amounts cannot exceed the verified uninsured disaster loss.

 

Economic Injury Disaster Loans (EIDL) – The law limits EIDL(s) to $1,500,000 for alleviating economic injury caused by the disaster.  The actual amount of each loan is limited to the economic injury determined by program standards, less business interruption insurance and other recoveries up to the administrative lending limit.  SBA also considers potential contributions that are available from the business and/or its owner(s) or affiliates.

 

Business Loan Ceiling – The $1,500,000 statutory limit for business loans applies to the combination of physical and economic injury, and applies to all disaster loans to a business and its affiliates for each disaster.  If a business is a major source of employment, SBA has the authority to waive the $1,500,000 statutory limit.

 

What Restrictions are there on Loan Eligibility?

 

Uninsured Losses – Only uninsured or otherwise uncompensated disaster losses are eligible.  Any insurance proceeds which are required to be applied against outstanding mortgages are not available to fund disaster repairs and do not reduce loan eligibility.  However, any insurance proceeds voluntarily applied to any outstanding mortgages do reduce loan eligibility.

 

Ineligible Property – Secondary homes, personal pleasure boats, airplanes, recreational vehicles and similar property are not eligible, unless used for business purposes.  Property such as antiques and collections are eligible only to the extent of their functional value.  Amounts for landscaping, swimming pools, etc., are limited.

 

Noncompliance – Applicants who have not complied with the terms of previous SBA loans are not eligible.  This includes borrowers who did not maintain flood and/or hazard insurance on previous SBA or Federally Insured loans.

 

Is There Help Available for Refinancing?

 

SBA can refinance all or part of prior mortgages that are evidenced by a recorded lien, when the applicant (1) does not have credit available elsewhere, (2) has suffered substantial uncompensated disaster damage (40 percent or more of the value of the property), and (3) intends to repair the damage. 

 

Homes – Homeowners may be eligible for the refinancing of existing liens or mortgages on homes, in some cases up to the amount of the loan for real estate repair or replacement.

 

Businesses – Business owners may be eligible for the refinancing of existing mortgages or liens on real estate, machinery and equipment, in some cases up to the amount of the loan for the repair or replacement of real estate, machinery, and equipment.

 

 

What if I Decide to Relocate?

 

You may use your SBA disaster loan to relocate.  The amount of the relocation loan depends on whether you relocate voluntarily or involuntarily.  If you are interested in relocation, an SBA representative can provide you with more details on your specific situation.

 

Are There Insurance Requirements for Loans?

 

To protect each borrower and the Agency, SBA may require you to obtain and maintain appropriate insurance.  By law, borrowers whose damaged or collateral property is located in a special flood hazard area must purchase and maintain flood insurance for the full insurable value of the property for the life of the loan.

 

For More Information Contact:  SBA Disaster Assistance Customer Service Center at

(800)-659-2955 or disastercustomerservice@sba.gov

www.sba.gov/services/disasterassistance

While there are other search engines that are available for use to search the Internet, Google has ascended to primacy for most users. Some of the best ways to use Google are the least known such as its ability to work as a calculator, convert currency and units of measurement, track packages, find the location of area codes and more. Google provides a helpful page on many of these features here. PC Magazine just published its 20 Google Tips and Tricks detailing these and others here.

 

To get the most out of a Google search, resources such as Google Guide can be extremely helpful in helping you draft your query and the interpreting the results. Google Guide also has several cheat sheets including this one for general search use and this one for doing basic and advanced calculations.

 

As lawyers, we too often focus on legal specific search and research tools provided by LexisNexis and Westlaw, but to be truly proficient, you need to use all of the tools at your disposal. Google can be a valuable addition to your Internet toolbox.

One of the many issues facing Wisconsin lawyers impacted by the recent flooding is figuring out what to do with client files that have been damaged? What are the ethical implications of losing these files due to the damage? For many attorneys, files have been soaked not only with water, but sewage, fuels and mud as well.  I turned for expert guidance to Attorney Tim Pierce, Ethic’s Counsel for the State Bar of Wisconsin for his input on this issue. Here’s what Tim has to say:

 

Files are the property of the client which the lawyer holds in trust on behalf of the client (See Wisconsin Ethics Opinion E-00-03 and SCR 20:1.15).  As such, the lawyer has a responsibility to “appropriately safeguard” client files [See SCR 20:1.15(6)].  This obligation, however, does not mean that lawyers have a responsibility to guarantee the safety of client files, but rather to take appropriate and reasonable steps to protect client files.  When, however, files are destroyed by events beyond the lawyer’s control, such as a flood, despite the lawyer’s reasonable efforts to protect the files, the lawyer should take certain steps.  First, current clients should be notified in a reasonably timely fashion of the destruction of their file.  Second, with respect to current clients, the lawyer must assess whether the destruction of the client’s file and/or other circumstances prevent the lawyer from providing the client with competent and diligent representation.  If the lawyer concludes that the lawyer cannot provide competent representation under the circumstances, the lawyer should so advise the client and withdraw [See SCR 20:1.16(a)].  Third, with respect to closed client files, the lawyer should attempt to notify the former clients of the destruction of their files when time and circumstances permit (See Wisconsin Ethics Opinion E-98-01).

 

You can submit further questions on this or any other legal ethics question to Tim at (608) 250-6168 or (800) 444-9404, ext. 6168, Monday through Friday, 9 a.m. to 4 p.m.

Physical Disaster Loans are a primary source of funding for permanent rebuilding andreplacement of uninsured or underinsured disaster damages to privately-owned real and/or personal property. SBA’s physical disaster loans are available to homeowners,   renters, businesses of all sizes and nonprofit organizations.

Economic Injury Disaster Loans provide necessary working capital until normal operationsresume after a physical disaster.  The law restricts economic injury disaster loans to small businesses only.

A two page PDF Fact sheet can be downloaded here. The actual loan application is only two pages, and it as well as the other supporting document requirements and disclosures can be found here. All in all, it’s a simplified process and the SBA will work with applicants who have trouble providing all of the requested supporting documents. Carl explained that even if a law office didn’t suffer any physical damage, but suffered loss of business because roads were closed preventing it from seeing clients or being open, essentially business interruption, then the economic injury loans were available.

The SBA also has a loan program from homeowners and renters that can be found here .

I want to thank Carl for taking the time to contact the State Bar of Wisconsin and myself to share this information and to give real meaning to the phrase  “I’m from the government and I’m here to help.”

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