U.S. to Offer Low-Interest Loans to Quake Victims

The U.S. Small Business Administration on Thursday announced it will offer low-interest loans to help repair businesses, homes and property damaged in the June 28 Sierra Madre earthquake.

The loan program was authorized one day after Gov. Pete Wilson asked for federal assistance to thousands who suffered everything from crumbling chimneys to cracked foundations in the 5.8 temblor. Losses, concentrated in the West San Gabriel Valley, totaled more than $42 million.

“It’s very good news,” said Sierra Madre Mayor Andrew R. Buchan. “Most people do think it’s taken too long, but I’m inclined to feel the time is reasonable under the circumstances.”

The federal loans will be offered in conjunction with a state loan program, which was activated last week when Wilson declared a state of emergency in Los Angeles County.

Applicants first must ask for assistance from the federal government. If the SBA rejects them or does not loan the entire amount requested, applicants will be directed to the state California Natural Disaster Assistance Program (CALDAP), which provides low-interest, deferred-payment loans to those unable to obtain them from other sources.

Next week, the SBA will set up offices in Pasadena and Arcadia. Loan-seekers either can walk in to apply or dial a toll-free number to have an application mailed to them.

Under the SBA loan program, each homeowner can receive a maximum of $100,000 for structural repairs. Business and apartment owners can receive up to $500,000, and up to $20,000 is available to each household for damaged property, such as furniture.

SBA loans would be paid over a period of up to 30 years, at either 4% or 8% interest, depending on what the applicant can afford.

The SBA also helps business owners who suffered income losses because of the earthquake, even if their buildings remained intact. People in this category could receive federal loans at 4% interest to pay bills or purchase inventory. Nonprofit organizations may also be eligible for loans.

There are no minimum or maximum income requirements. But the federal government isn’t granting loans to just anybody; applicants have to prove they can afford monthly payments, just as if they were asking for a bank loan.

If loan applications are approved, checks will be issued within 60 days, said Susan Stubbe, a Small Business Administration spokeswoman.

Applicants who are turned down by the SBA, and whose insurance doesn’t cover the damage costs, may be eligible for a state CALDAP loan. Under this program, established by the state Legislature in the wake of the 1989 Loma Prieta earthquake, homeowners can borrow up to $30,000, at 3% interest, to make repairs.

Quake Repair Loans The U.S. Small Business Administration will set up offices in the San Gabriel Valley to process earthquake repair loans. Beginning July 15, the offices will be open Monday through Saturday, 7 a.m. to 7 p.m. Representatives from the California Natural Disaster Assistance Program will be available to answer questions about state loans. Application Locations Pasadena Unified School District, 351 S. Hudson Ave., Pasadena.

Los Angeles County Park, Senior Citizens Center, 405 S. Santa Anita Ave., Arcadia.

Loan applications also may be requested by writing to the SBA, Box 13795, Sacramento, CA 95853-4795, or by calling (800) 468-1713 during normal business hours.

Needed Documents For homeowners: * Copies of the two most recent income tax returns.

* A copy of the property’s deed of trust.

* Any receipts for repair work that began before the loan program.

For business owners, all the above, plus: * Sales figures.

* Profit and loss statements.

* Records of accounts receivable and payable.