California IBank Disaster Relief Loan Guarantee Program

The Small Business Finance Center’s Disaster Relief Loan Guarantee Program was created to help businesses recover from a declared disaster. The loan guarantees provided by the Disaster Relief Loan Guarantee Program help mitigate barriers to capital for small businesses that have suffered a loss (either physical or economic) due to a disaster. The program helps businesses remain solvent during an extremely difficult time and eventually recover from their losses.

A loan guarantee mitigates the risk assumed by a traditional lending institution. A bank is more willing to provide access to capital if there is a guarantee in place that would repay up to 95% of the loan should there be a default.

Eligible uses of Disaster Relief Loan Guarantee financing proceeds include business continuance or to cure “economic injury” as a result of a disaster.

• Eligible applicants are small business owners who have been negatively impacted or experienced disruption by COVID-19, wildfires or other officially declared disasters.

• To be an eligible Disaster Relief Borrower, the Borrower must (a) have suffered Significant Actual Physical Damage to real or personal property and/or have suffered Significant Economic Injury, as a result of a disaster in a Disaster Area, and (b) be a small business with 750 or fewer employees; a Farm Enterprise; or a non-profit public benefit organization or social welfare organization that has received and maintains tax exempt status under the IRS code 501(c)3 or 501(c)4.

• “Disaster Area” means an area within California affected by a state of emergency and declared a disaster by the President of the United States, the Administrator of the United States Small Business Administration, or the United States Secretary of Agriculture, or declared to be in a State of Emergency by the Governor of the State of California.

• Businesses that are not eligible include passive real estate businesses (rental income, etc.).

• Sole Proprietor – Individual using legal name as business name that files a Schedule C, Schedule F, or has a fictitious business name or DBA statement

• The business activity must be eligible under the program and in one of the industries listed in the North American Industry Classification System (NAICS) codes list

• $1.25M max loan amount

• Loan proceeds must be used to recover from:

• Significant Actual Physical Damage

• Significant Economic Injury

• 95% or $1M (whichever is less) based on interest rate:

• 95% guarantee – interest rate does not exceed WSJP + 1%

• 90% guarantee – interest rate is between WSJP + 1% and WSJP + 2%

• 85% guarantee – interest rate exceeds WSJP +2%

• Fees: 2.5% of the guarantee amount

• $250 loan documentation fee

• The loan can be guaranteed up to 7 years and cover up to 95% of the loan. The interest rates are negotiated between the lender and the borrower. Qualifications are based on lender criteria.

Contact a participating lender in your area and apply for a loan.

FDCs are able to serve small businesses throughout the state of California. Contact geographically closest FDC office to find out more information.

Participating Lenders (FDC offices)

List of Participating Lenders

SBLGP Policy Manual