# What does an SBA physical disaster loan cover for a business?

**Short answer:** Up to $2 million to repair or replace real property, machinery, equipment, fixtures, inventory and leasehold improvements damaged in a declared disaster. It covers losses not fully covered by insurance or other sources. Businesses of any size can apply (sba.gov/disaster, read November 8, 2026).

Canonical page: https://www.sbaexpress.loans/answers/sba-business-physical-disaster-loan/
Last checked: 2026-11-08

It covers repair or replacement of property the disaster damaged, up to $2 million. SBA's disaster page sets the terms (read November 8, 2026). It is open to businesses of any size and most private nonprofits.

## Property it covers

Real property, machinery, equipment, fixtures, inventory and leasehold improvements.

## Insurance

The loan covers losses not fully covered by insurance or other sources. Insurance proceeds on business property may be deducted from the eligible amount. If you must apply insurance proceeds to a mortgage on the damaged property, you can include that amount in your application.

## Upgrades

You cannot use the funds to upgrade or expand a business, except as building codes require.

## Mitigation

You may be eligible for up to a 20% increase above the verified real estate damage, to reduce future risk. SBA's examples include:

- Hurricane roof straps and wind-rated garage doors.
- Elevating structures or adding a sump pump.
- Class A fire-rated roofs.
- Anchoring rooftop equipment.
- Hail guards on HVAC units.

## Rental property

SBA says qualified rental properties may be eligible under this program. Secondary homes and vacation properties are not eligible for home loans.

## Process

You apply online. SBA inspectors estimate the damage after you submit the application.

## Sources

- [sba.gov/disaster (read November 8, 2026)](https://www.sba.gov/disaster/)