Sec. 123.3 How are disaster declarations made?

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There are four ways in which disaster declarations are issued which make SBA disaster loans 
possible:

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               (1) The President declares a Major Disaster and authorizes Federal assistance, including individual assistance (temporary housing and Individual and Family Grant Assistance).
               (2) SBA makes a physical disaster declaration, based on the occurrence of at least a minimum amount of physical damage to buildings, machinery, equipment, inventory, homes and other property. Such damage usually must meet the following tests:
                        (i)  In any county or other smaller political subdivision of a State or U.S. possession, at least 
25 homes or 25 businesses, or a combination of at least 25 homes, businesses, or other eligible 
institutions, each sustain uninsured losses of 40 percent or more of the estimated fair replacement 
value or pre-disaster fair market value of the damaged property, whichever is lower; or
                        (ii)  In any such political subdivision, at least three businesses each sustain uninsured losses of 40 percent or more of the estimated fair replacement value or pre- disaster fair market value of 
the damaged property, whichever is lower, and, as a direct result of such physical damage, 25 
percent or more of the work force in their community would be unemployed for at least 90 days; and
                       (iii) The Governor of the State in which the disaster occurred submits a written request to SBA for a physical disaster declaration by SBA (OMB Approval No. 3245- 0121). This request should be 
delivered to the SBA Disaster Area Office serving the region where the disaster occurred within 60 
days of the date of the disaster.
            (3) SBA makes an economic injury disaster declaration in response to a determination of a natural 
disaster by the Secretary of Agriculture.
            (4) SBA makes an economic injury declaration in reliance on a state certification that at least 5 
small business concerns in a disaster area have suffered substantial economic injury as a result of 
the disaster and are in need of financial assistance not otherwise available on reasonable terms. 
The state certification must be signed by the Governor, must specify the county or counties or 
other political subdivisions in which the disaster occurred, and must be delivered (with supporting 
documentation) to the servicing SBA Disaster Area Office within 120 days of the disaster 
occurrence. The Administrator may, in a case of undue hardship, accept such request after 120 days 
have expired.

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The SBA publishes notice of any disaster declaration in the Federal Register. The published notice 
will identify the kinds of assistance available, the date and nature of the disaster, and the 
deadline and location for filing loan applications. Additionally, SBA will use the local media to 
inform potential loan applicants where to obtain loan applications and otherwise to assist victims 
in applying for disaster loans. SBA will accept applications after the announced deadline only when 
SBA determines that the late filing resulted from substantial causes beyond the control of
the applicant.[61 FR 3304, Jan. 31, 1996, as amended at 64 FR 13667, Mar. 22, 1999]