What are the requirements for an SBA disaster loan?


The Small Business Administration (SBA) was created to support and entice small businesses in the United States. Part of their function is to provide financial support in response to disasters. 

While the SBA aims to be generous and helpful with loan assistance, in the case of disasters like the coronavirus pandemic there are strict requirements for qualifying businesses (in order to allow the SBA to help as many companies as possible).

SBA disaster loan requirements

There are four main considerations for an SBA disaster loan: location, credit score, repayment ability, and available collateral.


To qualify for an SBA disaster loan you must operate a business located within a declared disaster zone. This might include a city, county, state, or country depending on the nature of the disaster. 

Check the SBA website for a current list of areas that have been officially declared disaster zones to determine if you fall in a qualified area. 

Credit requirements

In order to qualify for an SBA disaster loan, the Small Business Administration will perform a routine credit check. As with any loan, the lender is assuming a risk and credit checks help lenders to be informed and to mitigate those risks. 

If your small business credit score isn’t stellar, the SBA will still consider other factors, such as recent income and your history of rent, utilities, insurance, and other payments. 

(Here are some current recommendations for best business loans for bad credit).


As with any loan, the lender needs to consider your ability to pay back the loan in full. This will likely be addressed on a case-by-case basis for businesses affected by coronavirus. Some businesses will rebound quickly and be able to repay the loan easily, while others may need more money and more time to adapt to the economic climate created by the pandemic.


If you are in need of an SBA disaster loan larger than $20,000-25,000, it is likely that the lender will insist on some form of collateral to complete the loan process. 

Collateral is any property or asset of value that a lender can use to balance the weight of a loan if there is substantial risk. For example, the SBA may consider your business property as collateral for a large loan in the event you were unable to meet the terms of the loan.

Keep in mind—these loans are designed to be as accessible as possible, so don’t be afraid to apply and work with the SBA, even if you have bad credit or lack of collateral.